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A bipartisan bill introduced 28 February 2019, by the Chairman and the ranking minority member of the Senate Finance Committee would retroactively extend some 29 expired tax breaks to 2018, and also make them applicable to 2019. Most of the tax breaks had previously been extended to 2016 and 2017 at the beginning of 2017 but had again been allowed to expire. They were not included in the 2019 budget legislation that prevented another government shutdown in order to move that legislation more rapidly.
Although introduction of the bill drew widespread praise, its path to enactment is by no means easy. The Finance Committee must itself debate and pass the bill, with possible amendments and disagreements. The full Senate must also pass the bill.
And the House has already signaled that it is in no hurry to proceed.
House Ways and Means Committee Chairman Richard Neal is planning to hold hearings during March to examine the expired provisions in more detail. Neal has long expressed dissatisfaction with the practice of endlessly extending provisions without determining whether they should be made permanent or deleted entirely, and it is likely the hearings he plans to hold will examine each provision in some detail. The hearings also will cover proposed technical corrections to the Tax Cuts and Jobs Act (TCJA) passed in late 2017.
Consequently, Worldwide ERC® members should not expect rapid resolution of the fate of a couple of expired provisions which are of interest to the mobility industry. These are the exclusion for discharge of mortgage debt on a principal residence, and the deduction for mortgage insurance premiums. Both would be extended through 2019 by the Senate bill.
Both of those tax breaks are also the subjects of legislation introduced to make them permanent. H.R. 284 and H.R. 285, introduced in the House by Rep Brownley (D. CAL) would make the mortgage premium deduction and the mortgage debt discharge exclusion, respectively, permanent. It is expected that those bills will become a part of the March hearings to be held by the Ways and Means Committee
Employees who would take advantage of either of these provisions face uncertainty as to their taxes for 2018. Many will have to delay filing in order to know whether the breaks are available. It is important that Congress make decisions in time for 2018 returns to be filed.
Worldwide ERC® continues to monitor the impact of the Tax Cuts and Jobs Act on talent mobility programs and policies.
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