The House on December 3 approved the Tax Increase Prevention Act of 2014 (HR 5771). The bill extends individual, business and energy tax incentives through 2014 and makes technical corrections to existing tax laws. The timeframe for the Senate taking up the House bill is unclear as the lame-duck session of Congress draws to a close. The House also passed the Achieving a Better Life Experience (ABLE) Act of 2014 (HR 647) on December 3.
The House voted 378 to 46 to approve the one-year extension of the extenders. Included in HR 5771 are the state and local sales tax deduction, higher education tuition deduction, research tax credit, production tax credit, and transit benefits parity, among many others (TAXDAY, 2014/12/02, C.2). The bill also allows multiemployer pension plans to take an additional five years to amortize funding shortfalls and extends special rules for three categories of severely underfunded multiemployer pension plans.
Before the vote, Rep. Kevin Brady, R-Texas, a senior member of the House Ways and Means Committee, said that the extension would keep the tax provisions as they are for one more year. “I am hopeful this is the last time we have to do this. We are one of the few countries with key parts of our tax code that are temporary,” Brady said.
At press time, the Senate’s Democratic leaders have not indicated when the chamber may take up HR 5771. The Senate Finance Committee previously approved a two-year extension of the incentives in the EXPIRE Act (Sen. 2260).
Along with the extenders, the House voted 404 to 17, to approve the ABLE Act. The bill creates tax-exempt accounts for use by individuals to pay qualified disability expenses. These include the costs of education and personal support.
Among its revenue raisers, the ABLE Act indexes for inflation certain civil tax penalties. The bill also allows certain professional employer organizations to become solely responsible for the customer’s employment taxes, exclude dividends received from a foreign subsidiary from the additional 20-percent tax on personal holding company income, and make changes to Medicare.
“Individuals with disabilities face challenges most of us cannot understand. This will allow them to reach their full potential,” Rep. Ander Crenshaw, R-Fla., who introduced the ABLE Act, said.
In the Senate, Sen. Bob Casey, D-Pa., has been a longtime champion of the ABLE Act. “This legislation will allow families who have a child with a disability to save for their long-term care in 529-style savings account. This is a model that has proven successful for college savings,” Casey said.