On December 18, 2015 the Protecting Americans From Tax Hikes Act of 2015 was signed into law impacting most individuals and businesses. The Act extends many favorable tax benefits and makes many others permanent. Some of the key provisions in the bill are highlighted in this letter.
- Permanently extends the $500,000 and $2 million limits for Section 179 depreciation and indexes both for inflation beginning in 2016.
- Permanently extends the R&D tax credit for taxpayers with less than $50 million average in gross receipts for prior three years.
- Permanently extends the 15-year recovery period for qualified leasehold improvements, qualified restaurant property, and qualified retail property.
- 5 – year extension of the work opportunity tax credit.
- 5 – year extension of bonus depreciation (50% in 2015-2017; 40% in 2018; 30% in 2019).
- Imposes a 2 – year delay of the 2.3% medical device excise tax.
- Child Tax Credit made permanent.
- American Opportunity tax credit made permanent.
- Enhanced Earned Income Credit made permanent.
- Permanently extends above the line deduction up to $250 for certain expenses of teachers and adjust for inflation beginning in 2016.
- Permanently extends the State and local sales tax options.
- Permanently extends the ability of individuals at least 70 ½ years of age to exclude from gross income up to $100,000 of qualified charitable distributions from IRAs.
- 2 – year extension of exclusion from gross income the discharge of qualified principal residence
- 2 – year extension of the deduction of mortgage insurance premiums.
- 2 – year extension of the above the line deduction for qualified tuition and related expenses for higher education.
- 2 – year extension for home energy credits up to $500.
What we have highlighted above is a very small representation of the provisions that were part of the legislation. Please contact our office if you wish to have clarification of how the new Act may impact your specific situation.