The Senate Finance Committee Passes Tax Extenders For 2014 & 2015

Access Leading Tax Experts And Technology
In Our Global Digital Marketplace

Written by Peter J. Scalise | Posted in Federal • R&D Credit Services • Real Estate • Tax Provision/Tax Reporting

On April 3rd, the Senate Finance Committee overwhelmingly approved the Expiring Provisions Improvement Reform and Efficiency Act of 2014 (hereinafter “EXPIRE”) with a strong bipartisan vote, setting the stage for Congress to address. The House Ways and Means Committee is expected to have its own extension package later this month. To that end and as a caveat, it is not certain whether any or all of these incentives will become law.

The bill extends many long awaited business tax extenders that originally expired on December 31, 2013 and modifies other certain tax provisions. Some of the key temporary tax benefits in this EXPIRE bill includes:

• 50% Bonus Depreciation & §179 Expensing Thresholds Return: The 50% bonus depreciation provisions for qualified business property would be extended through the end of 2015 and, for certain property, to 2016. The I.R.C. § 179’s increased expensing amounts would also be extended through 2015.

• 15-Year Life for Qualified Real Property Extended: Qualified leasehold improvement property, qualified restaurant property, and qualified retail improvement property will have a 15-year depreciation recovery period through the end of 2015.

• Energy Efficiency Deductions for Commercial Buildings: Under I.R.C. §179D, deductions of up to $1.80 per square foot for energy efficient commercial building property would be extended for two years through the end of 2015. Also, as an aide to nonprofits, the rules were modified to allow these organizations to allocate deductions to architects and engineers.

• R&D Tax Credit Extended: Research credits for qualified research activities would be extended for two years through the end of 2015. Additionally, the credits would now offset AMT, and would be expanded to qualifying startup businesses, allowing the credits to offset payroll taxes.

• Energy Efficiency Credits for Property Developers Get Two More Years: A two-year extension would allow apartment developers and home builders a $2,000 tax credit, under I.R.C. §45L, for new energy efficient homes that are first leased or sold by the end of 2015. As an added bonus, developers and builders would be able to amend returns to claim tax credits they missed from previous years.

• Hiring & Employment Credits Extended: Work Opportunity Tax Credits and Empowerment Zone Tax Incentives would be extended through the end of 2015.

In accordance with Circular 230 Disclosure

Peter J. Scalise

About the Author
Peter J. Scalise serves as the National Partner-in-Charge of the Federal Tax Credits and Incentives Practice at SAX CPAs LLP. Peter is a highly distinguished member of the Accounting Today Top 100 Influencers and has approximately thirty years of progressive Big 4 and Top 100 public accounting firm experience developing, managing, and leading large scale tax advisory practices on a regional, national, and global level.
Peter also serves as a passionate philanthropist and a member of several Boards of Directors and Boards of Advisors for local, regional, and national charities in connection with poverty and hunger alleviation; economic development; environmental conservation; health and social services; supporting veteran and military service personnel along with preserving arts and cultural programs.