Tax and Healthcare Reform Continue in 2018
posted Jan 30, 2018 by Norman LeBlanc, CPA in the Global Tax Blog
Less than a month ago, a massive overhaul of the tax code — commonly known as the Tax Cuts and Jobs Act (TCJA) — was enacted. But that was just a starting point. Several other items remain on the tax reform agenda, and lawmakers are counting on bipartisan support to get some of the proposals through congressional vote this year. Here’s a summary of tax-related legislation that’s likely to be addressed in the coming months.
Continuing Resolution (CR)
On January 22, a continuing resolution ended a brief government shutdown and extends government funding through February 8. The resolution also includes provisions to:
- Retroactively postpone the 2.3% excise tax on sales of medical devices through 2019, which would provide temporary savings to manufacturers of medical devices,
- Delay implementation of the 40% Cadillac tax on high-cost employer health coverage through 2021, which would provide temporary relief to some employers that offer generous health plans,
- Postpone the annual excise tax imposed on health insurers for calendar year 2019, and
- Extend funding for the Children’s Health Insurance Program (CHIP) through 2023.
Inclusion of the health care related provisions appealed to lawmakers who were hesitant to support a fourth stopgap spending bill. Inclusion of the CHIP renewal helped garner votes from congressional members who felt left out of tax reform discussions in December. In exchange for bipartisan support for the CR, Congress has also promised to address the Deferred Action for Childhood Arrivals (DACA) program in early February. DACA is set to expire on March 5.
On February 9th, President Trump signed a bill to retroactively extend several expired tax provisions. The “Tax Extender Act of 2017”extends the following through 2017 tax season.
- Exclusion from gross income of discharge of qualified principal residence indebtedness
- Mortgage insurance premiums treated as qualified residence interest
- Above-the-line deduction for qualified tuition/related expenses
- Empowerment Zone tax incentives
- Credit for nonbusiness energy property
- Credit for new qualified fuel cell motor vehicles
- Credit for alternative fuel vehicle refueling property
- Credit for 2-wheeled plug-in electric vehicles
- Second generation biofuel producer credit
- Biodiesel and renewable diesel incentives
- Credits with respect to facilities producing energy from certain renewable resources
- Credit for energy-efficient new homes
- Special allowance for second generation biofuel plant property
- Energy efficient commercial buildings deduction
- Excise tax credits relating to alternative fuels
More Changes in the Pipeline
In addition to the CR and extender provisions, Congress is likely to take up IRS reform and a technical corrections bill later this year to fix some of the oversights in the TCJA. These corrections are expected to resolve unintended impacts of the new law, clarify confusing language, correct omissions and close loopholes that practitioners may realize from complicated provisions of the new law.
Our tax professionals are atop the latest changes to the federal tax rules and can help you identify opportunities to lower your tax bill. Give us a call to discuss your specific situation and how tax reform will impact you or your business.