The President has signed into law the Tax Increase Prevention Act of 2014, which retroactively extends for one-year expired tax provisions, makes technical corrections to existing tax laws, and enacts the ABLE Act.
The Act includes provisions that extend for one year retroactively back to January 1, 2014, the optional sales tax deduction (in lieu of state and local income taxes), the above-the-line higher education deduction, the exclusion of income from mortgage debt cancellation on a principal residence and the above-the-line classroom expense deduction, among others for individuals. Business provisions include one-year retroactive extensions for the research tax credit, 50-percent bonus depreciation, enhanced Section 179 expensing (including cost recovery for qualified leasehold improvements, retail improvements and restaurant property), the New Markets Tax Credit and the Work Opportunity Tax Credit, in addition to a one-year extension of other tax breaks.
The Act also allows multi-employer pension plans to take an additional five years to amortize funding shortfalls and extends special rules for three categories of severely underfunded multi-employer pension plans.
The Act includes the ABLE (Achieving a Better Life Experience) Bill, which creates tax-exempt accounts for use by individuals to pay qualified disability expenses. These include the costs of education and personal support.
The ABLE Bill also indexes for inflation certain civil tax penalties. It also allows certain professional employer organizations to become solely responsible for the customer’s employment taxes, excludes dividends received from a foreign subsidiary from the additional 20-percent tax on personal holding company income and makes changes to Medicare.
LCPA Tax Alerts – December 22, 2014
Call us with any questions you may have regarding these provisions at 228-396-2996.