As we prepare for the beginning of tax season, we want to bring to your attention the 2015 Tax Extenders Bill, officially the "Protecting Americans from Tax Hikes Act." The Act was recently signed into law by President Barack Obama.

The Act retroactively extends many of the tax provisions that would have otherwise expired on December 31, 2014. Some of the most prominent provisions in this act are listed below. The provisions within this legislation will be beneficial to many individuals and businesses for years to come.

Permanent extensions for families and individuals:

  • Child Tax Credit
  • American Opportunity Tax Credit
  • Earned Income Tax Credit
  • Deduction for certain expenses of elementary and secondary school teachers – $250 indexed for inflation
  • Deduction of state and local general sales taxes
  • Tax-free distributions from individual retirement plans for charitable purposes (individuals 70 ½ and older)
  • Computer equipment and technology as a qualified education expense for distributions from a Code Sec. 529 plan

Non-permanent extensions for families and individuals – extended through 2016:

  • Mortgage insurance premiums treated as qualified residence interest
  • Deduction for qualified tuition and related expenses
  • Exclusion from gross income of discharge of qualified principal residence indebtedness

Permanent extensions for businesses:

  • Section 179 deduction up to $500,000 (indexed for inflation) ($2 million investment threshold, also indexed for inflation). Qualified property eligible for Section 179 now includes air conditioning and heating units
  • Extension and modification of the research and development credit:
  • For tax years beginning after 2015, eligible small businesses may use the R&D credit to offset both regular and AMT taxes
  • For tax years beginning after 2015, qualified small businesses may use a portion of the R&D credit against payroll taxes
  • 15-year straight-line cost recovery for qualified leasehold improvements, qualified restaurant buildings and improvements, and qualified retail improvements

Non-permanent extensions for businesses:

  • Bonus depreciation on qualifying property is now subject to the following phase-outs:
    • 50% bonus depreciation for property placed in service in 2014 through 2017
    • 40% bonus depreciation for property placed in service in 2018
    • 30% bonus depreciation for property placed in service in 2019
  • The Work Opportunity Tax Credit is extended through 2019. This credit also applies to individuals who are long-term unemployment recipients.

The permanent and non-permanent extensions contained within this Act will be a major benefit in tax planning for your business and individual needs. If you have any questions on how this new legislation with impact you for 2015 and in the future, feel free to reach out to us.

Delap LLP is one of Portland’s largest local tax, audit, and consulting accounting firms, located in Lake Oswego, Oregon.


P.L. 114-113, HR 2029