U.S. Congress Extends Expired Tax Provisions

As a part of a giant year-end spending bill, Congress agreed to extend a number of tax provisions that had expired after 2017. The President has signed the bill.

 Among the tax provisions extended are two of interest to the mobility industry. They are the exclusion for forgiven mortgage debt up to $2 million, and the deduction for private mortgage insurance. Both had expired after 2017, but are now extended for 2018 through 2020. Worldwide ERC® advocated for their extension, which should be of benefit to members.

Beginning in 2007, the tax law has included a provision under which up to $2 million of mortgage debt on a principal residence may be forgiven tax free to the borrower. See section 108(a)(1)(E). The provision is limited to debt cancellation resulting from decline in value of the residence or the financial condition of the borrower. The provision does not apply to home equity debt, or to any portion of a refinanced mortgage under with cash was taken out. However, it has been of substantial help to companies seeking to relocate homeowners who had mortgage balances exceeding their home value.

The provision has always been temporary, expiring periodically. As noted, it expired after 2017, and so was unavailable when returns for 2018 were filed. Any taxpayers who qualified for that relief in 2018 are now able to file amended returns to take advantage of the provision.

The deduction for private mortgage insurance is also of benefit to Worldwide ERC® members, and is likewise now available on 2018 amended returns, and returns for 2019 and 2020.

Legislation has periodically been introduced to make each provision permanent, but the chances of passage are unclear.

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How This Impacts Mobility

These two provisions make it easier and less costly to relocate employees in some instances.

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