MEDIA ALERT – Make sure you aren’t caught by surprise if tax provisions expire at year’s end

Wolters Kluwer Tax & Accounting looks at the Federal income tax provisions currently scheduled to expire at the end of 2021

--(BUSINESS WIRE)--Wolters Kluwer Tax & Accounting:

What: With the US Congress still considering significant year-end tax legislation, it is not yet clear whether some tax provisions currently scheduled to expire at the end of 2021 will in fact be allowed to expire. US Congress continues to permit a long list of regularly-expiring provisions to be extended for only a year or two at a time, sometimes retroactively. In order to meet budget restraints, US Congress also inserts sunset provisions into tax legislation with the hope that the provisions can be extended before the sunset date arrives. Legislators also sometimes create temporary tax provisions to assist with temporary issues, such as the COVID pandemic.

Why: Despite the uncertainty, it is important for taxpayers to be aware of expiring provisions so they can take advantage of opportunities today. Some of the tax provisions currently expiring at the end of 2021 include the following.

COVID-related tax provisions

• The recovery rebate credit
• The employee retention credit was extended to December 31, 2021, but was retroactively ended on September 30, 2021
• The paid sick and family leave credit expired as of September 30, 2021
• The enhanced child tax credit expires at the end of 2021 although extensions are proposed in the Build Back Better bill
• The enhanced earned income tax credit for childless individuals expires at the end of 2021 although extensions are proposed in the Build Back Better bill
• The premium tax credit for individuals receiving unemployment compensation
• The enhanced child and dependent care credit
• The enhanced employer-provided dependent care assistance exclusion

Charitable contribution deduction enhancements

• The charitable deduction for non-itemizes
• The enhanced itemized charitable deduction
• The enhanced corporate charitable deductions

Regularly expiring provisions

• The treatment of mortgage insurance premiums as qualified residence interest
• The credit for health insurance costs of eligible individuals
• The credit for non-business energy property
• The credit for alternative fuel cell motor vehicles
• The credit for new qualified fuel vehicle refueling property
• The two-wheel plug-in electric drive vehicle credit
• Several business-focused energy credits
• Three tax breaks related to Indian reservations
• The mine rescue team training credit
• The classification of certain racehorses as three-year property
• The black lung liability trust fund excise tax

Who: Tax expert Mark Luscombe, JD, LL.M, CPA, Principal Federal Tax Analyst, for Wolters Kluwer Tax & Accounting, can help discuss the possible expiration of tax provisions at the end of 2021 and related planning opportunities.

PLEASE NOTE: These materials are designed to provide accurate and authoritative information in regard to the subject matter covered. The information is provided with the understanding that Wolters Kluwer Tax & Accounting is not engaged in rendering tax advice or accounting, legal, tax or other professional service.

Contact: To arrange an interview with Mark Luscombe or other federal and state tax experts from Wolters Kluwer Tax & Accounting on this or any other tax-related topics, please contact Bart Lipinski.