Summary of Tax Agmt

Published by Michael Novogradac on Wednesday, December 8, 2010 - 12:00am

Key Features of the Obama-Republican tax package (based on best information available at this time & we expect changes – Check back frequently):  (This blog has been updated IN BOLD for draft of Senate bill, Thurs night-12/8.) Updated 12-13. 

Stay tuned, as Senate debates bill and House objects, more ‘tweaks’ are likely.

  1. 2-year extension of all of the existing individual income tax rates regardless of income.
  2. 2-year extension of the alternative minimum tax “patch.”
  3. 1-year provision to lower employee’s share of Social Security payroll tax from 6.2% to 4.2%.
  4. 13-month extension of unemployment insurance benefits.
  5. Extension of “traditional” extenders for 2010 & 2011, including:
    1. R&D Credit.
    2. NMTC [3.5 or 5.0?] (including AMT Offset for QEIs between 3/15/10 & 1/1/2013). $3.5 BILLION w/o AMT OFFSET.
  6. Extension of estate tax at top rate of 35% and $5 million exemption for 2 years.
  7. Extension of Child Care Tax Credit for 2 years.
  8. Extension of expanded EITC for 2 years.
  9. Extension of American Opportunity Tax Credit for college tuition for 2 years.
  10. 100% Expensing of certain property placed in service after 9/8/2010 through 2011.
    1. Then 50% for 2012.
  11. Extension of GO Zone PIS date for two years. for GO Zone LIHTCs to 12/31/2011.
    1. Two year extension (for costs incurred in 2010 and 2011 property placed in service through the end of 2011) of the increase in the rehabilitation credit in the GO Zone.
    2. One year extension to 12/31/2011 of 50% additional depreciation for GO Zone property (includes real property).
  12. Two Year Extension of Liberty Zone issuance authority to 12/31/2011.

Provisions that appear to be be under discussion:

  1. Extension of Section 1602 cash grants for LIHTCs. EXCLUDED
  2. Extension of Build America Bonds. EXCLUDED

Provisions that appear to be out at this point:

  1. 1603 extension of renewable energy cash grants. INCLUDED!
  2. Section 48C advanced manufacturing energy tax credits.  EXCLUDED!
  3. $1 billion Housing Trust Fund. EXCLUDED!

Legislation details here.

Stay tuned, as we expect additional “tweaks” to the legislation.

Michael J. Novogradac, Novogradac & Company LLP