First Step of Extending Expired Tax Breaks PassedMay 01, 2014
Senate Finance Committee voted to extend about 50 taxpayer friendly tax provisions.
On April 3rd the Senate Finance Committee voted to extend about 50 taxpayer friendly tax provisions. What would be known as the EXPIRE Act (Expiring Provisions and Improvement Reform and Efficiency Act) it still needs to be approved by both houses of Congress before it can be given to the President for approval. It is an important first step. Many believe the bill will pass in both chambers after the November elections. If the bill is passed it could provide tax benefits for things such as: wind energy, multi-national corporations, college tuition, auto-racing tracks, Hollywood, and more.
The EXPIRE act would also extend and significantly revamp the research and development tax credit through December 31, 2015.
These are a few of the changes in particular that could greatly help manufacturing businesses that are involved in research and development:
- For S-corps and LLC’s, the R&D tax credit will be allowed to offset shareholder’s AMT for 2014 and 2015!
- “Startups” will be allowed to take a credit of up to $250,000 against the payroll taxes relating to the amounts paid on its employee’s wages. However, this would only be available to companies that have existed for less than five years and that have less than $5-million dollars in annual gross receipts.
This Act, as indicated by its name is meant to EXPIRE. It would likely be the final bill that temporarily renews the tax extenders. By the end of next year congress (and the President) will have to agree to cancel or renew them permanently within a comprehensive tax reform frame work.