The President signed the Protecting Americans from Tax Hikes Act (PATH) of 2015 which extended and in some cases made permanent a number of important tax provisions
The Bill makes permanent 22 expired tax provisions including:
- Enhanced Child Tax Credit
- Enhanced American Opportunity Tax Credit for higher education
- Research & Development Tax Credit and beginning of 2016 allows private business with under $50 million in receipts to utilize the credit against the AMT
- Enhanced Earned Income Tax Credit
- Educator’s $250 classroom expense deduction, indexes for inflation and makes professional development expenses eligible
- 15-year depreciation of qualified leasehold retail and restaurant improvements
- Exclusion from gross income qualified charitable distributions from IRAs of up to $100,000 of taxpayers over age 70 1/2
- Optional state and local sales tax deduction in lieu of state and local income tax
- Parity among Employer provided mass transit and parking benefits exclusion from income
- Permanently extending the rule reducing to five years (rather than 10 years) the period for which an S Corporation must hold its assets following conversion from a C Corporation to avoid the tax on built-in gains.
- The 100% exclusion of gain on qualified small business stock
- Increasing the Section 179 expensing of fixed asset addition and phase-out amounts to a new threshold at $500,000 and $2 million, respectively, from the current amounts of $25,000 and $200,000. The bill also indexes future amounts to inflation and removes restrictions on leasehold improvements.
Six expired provisions will be extended for five years including:
- Bonus depreciation will continue at 50% for 2015 through 2017, to be reduced to 40% in 2018 and 30% in 2019
- The Work Opportunity Credit extends through 2019 and includes long term unemployed (27 weeks or more)
Other Misc. Items:
- The “Cadillac” 40% excise tax on high-cost health plans has been postponed until 2020
- Suspends the 2.3% medical device excise tax for sales in 2016 and 2017
- Requires all W2 and W3 forms to be filled by January 31
