As posted by Thomson Reuters on 2/12/18

On 2/9/18, Congress passed, and the President signed into law, H.R. 1892, the “Bipartisan Budget Act of 2018” (the Budget Act). In addition to providing a continuing resolution to fund the federal government through 3/23/18, this 2-year budget contains a host of tax law changes. The Budget Act retroactively extends through 2017 over 30 so-called “extender” provisions, provides a number of miscellaneous tax-related provisions, and includes tax relief to victims of the California wildfires and Hurricanes Harvey, Irma, and Maria.

The following general topics are outside the scope of this Tax Planning Letter:

• Non-extender tax-related provisions
• Disaster relief provisions

INDIVIDUAL EXTENDER PROVISIONS

The Budget Act extended the following individual provisions for one year:

• Exclusion for discharge of indebtedness on a principal residence under §108(a)(1)(E)
• Treatment of mortgage insurance premiums as deductible qualified residence interest under §163(h)(3)
• Deduction for qualified tuition and related expenses under §222(e)

BUSINESS EXTENDER PROVISIONS

The Budget Act extended the following business provisions for one year (except as noted below):

• Indian employment tax credit under §45A(f)
• Railroad track maintenance credit under §45G(f)
• Mine rescue team training credit under §45N
• 3-year depreciation for race horses two years old or younger under §168(e)(3)(A)
• 7-year recovery period for motorsports entertainment complexes under §168(i)(15) and §168(e)(3)(C)(ii)
• Accelerated depreciation for business property on an Indian reservation under §168(j)(8)
• Election to expense advanced mine safety equipment under §179E(g)
• Expensing rules for certain film, television, and live theatrical productions under §181
• Deduction allowable with respect to income attributable to domestic production activities in Puerto Rico under §199(d)(8)
• The alternative 23.8% maximum tax rate for qualified timber gains of C corporations under §1201(b)
• Empowerment zone tax incentives under §1391, §1394, and §1397B
• American Samoa economic development credit
• Temporary increase in limit on cover over of rum excise tax revenues (from $10.50 to $13.25 per proof gallon) to Puerto Rico and the Virgin Islands, extended for five years
  

ENERGY EXTENDER PROVISIONS

The Budget Act extended the following energy provisions for one year (except as noted below):

• Credit for certain non-business energy property under §25C(g)
• Credit for residential energy property (as modified) under 26D(g)
• Qualified fuel cell motor vehicle credit under §30B(k)(1)
• Alternative fuel vehicle refueling property credit under §30C(g)
• Credit for 2-wheeled plug-in electric vehicles under §30D(g)(3)(E)(ii)
• Second generation biofuel producer credit under §40(b)(6)(J)
• Income tax credits for biodiesel fuel, biodiesel used to produce a qualified mixture, small agri-biodiesel producers, renewable diesel fuel and renewable diesel used to produce a qualified mixture under §40A
• Credit for production of Indian coal under §45(e)(10)(A)
• Beginning-of-construction date for non-wind renewable power facilities eligible to claim the electricity production credit or investment credit in lieu of the production credit under §45(d) and §48(a)(5)
• Credit for construction of new energy efficient homes under §45L(g)
• Five-year extension and phaseout of energy investment credits under §48
• Special depreciation allowance for second generation biofuel plant property under §168(l)
• Energy efficient commercial buildings deduction under §179D(h)
• Extension of special rule for sales or dispositions to implement Federal Energy Regulatory Commission (“FERC”) or State electric restructuring policy for qualified electric utilities under §451(k)
• Extension of excise tax credits and outlay payments for alternative fuel, and excise tax credits for alternative fuel mixture under §6426(d)(5) and §6427(e(6)(C)
• Extension of Oil Spill Liability Trust Fund financing rate under §4611
• Modification of the credit for production from advanced nuclear power facilities under §45J
• Enhancement of the carbon dioxide sequestration credit under §45Q