On December 16, in a vote of 76 to 16, the Senate passed the long-anticipated “extenders bill,” extending 55 tax provisions that expired at the end of 2013. The bill had been passed by the House of Representatives on December 3, 2014 and now heads to the President’s desk where it is expected to be signed into law.
As a one-year extension of tax provisions that expired on December 31, 2013, it is retroactive to January 1, 2014; but it allows all the extended provisions to expire again on December 31, 2014, just 15 days after the bill’s passage by the Senate. Expressing frustration that the affected provisions will expire again in a matter of weeks, Senate Finance Committee Chair Ron Wyden (D-Ore.) noted that the bill “doesn’t have the shelf life of a carton of eggs.” Sen. Wyden made a failed effort to push a two-year extension of these provisions.
The final bill remains unchanged from the House bill, extending various business tax provisions such as differential wage payment credits, accelerated depreciation of business property, the subpart F look-through rules and active financing exception, the research credit, and deductions for gross domestic production activities in Puerto Rico. The bill offers some certainty to taxpayers who will need to file 2014 tax returns soon, but it offers little long-term stability to businesses and individuals trying to estimate tax liabilities for the 2015 tax year. The bill had a congressional budget score of approximately $45 billion.
The extenders bill was combined with legislation known as the ABLE Act, which permits tax-free savings accounts for individuals with disabilities. These funds can be used to manage medical, transportation, housing, and educational costs without interfering with continued Medicaid and SSI benefits. It also raised the threshold for Joint Committee review of C corporation refunds or credits to $5 million from $2 million, which should provide some relief to corporate taxpayers claiming refunds.
President Obama is expected to sign it into law later this week.
See all the provisions included in the extenders bill.