Two weeks ago, House Republicans released a major tax package highlighted by extensions to expiring tax provisions, disaster tax relief, retirement tax treatment changes, innovation tax incentives, technical corrections to the Tax Cuts and Jobs Act of 2018, and IRS reforms. NTUF analyzed that package here.
House Republicans have now updated that package, making some significant changes. Below is a summary of the most important changes in the revised legislation:
Extensions of expiring tax provisions have been completely removed. NTUF has repeatedly emphasized the misleading nature of tax extenders, as their “temporary” status makes them appear to have a far smaller budget impact then they really do. Declining to extend these provisions is a positive step — should Congress determine that any of these provisions are priorities, they should either be made permanent or handled on the spending side.
529 education savings plans would see some expansion. Under the House’s legislation, eligibility would be extended to costs associated with apprenticeship programs, homeschooling, student loan repayment. Unborn children would also become eligible beneficiaries of 529 plans.
Provisions that were originally part of the American Innovation Act have been removed. These provisions would have quadrupled the amount of start-up costs new businesses can deduct and indexed the amount to inflation, as well as preserving deductions for net operating losses in the event of an ownership change.
Several taxes originally stemming from the Affordable Care Act have been delayed or eliminated. The medical device tax, health insurance tax, and Cadillac tax have been delayed for five, two and one year(s) respectively. The tax on indoor tanning services has been repealed entirely.
Provisions related to disaster tax relief, retirement savings, and IRS reform have remained the same.