Several tax provisions set to expire at end of 2020

The following tax provisions will expire Dec. 31, 2020, if not extended by Congress:

Provisions for individuals

  • Sec. 35 credit for health insurance costs of eligible individuals.
  • Sec. 108(a)(1)(E) gross income exclusion for discharge of indebtedness on a principal residence.
  • Sec. 139B gross income exclusion for certain benefits provided to volunteer firefighters and emergency medical responders.
  • Sec. 163(h) treatment of qualified mortgage insurance premiums as qualified residence interest.
  • Sec. 213(f) 7.5% (instead of 10%) AGI floor for medical expense deductions.
  • Sec. 222 deduction for qualified tuition and related expenses.

Business credits

  • Sec. 45A Indian employment credit.
  • Sec. 45D new markets tax credit.
  • Sec. 45N mine rescue team training credit.
  • Sec. 45S employer credit for paid family and medical leave.
  • Sec. 51 work opportunity credit.

Depreciation and expensing

  • Sec. 168(e)(3)(A) three-year recovery period for racehorses two years old or younger.
  • Sec. 168(e)(3)(C)(ii) seven-year recovery period for motorsports entertainment complexes.
  • Sec. 168(j)(9) accelerated depreciation for business property on Indian reservations.
  • Sec. 181 special expensing rules for certain film, television, and live theatrical productions.

Energy provisions

  • Sec. 25C 10% credit for qualified nonbusiness energy property.
  • Sec. 30B credit for qualified fuel cell motor vehicles.
  • Sec. 30C 30% credit for the cost of alternative (nonhydrogen) fuel vehicle refueling property.
  • Sec. 30D 10% credit for plug-in electric motorcycles and two-wheeled vehicles.
  • Sec. 40(b)(6) credit for each gallon of qualified second-generation biofuel produced.
  • Sec. 45(d) and Sec. 48 beginning-of-construction date for renewable power facilities eligible to claim the electricity production credit or investment credit in lieu of the production credit.
  • Sec. 45(e)(10)(A)(i) production credit for Indian coal facilities.
  • Sec. 45L credit for each qualified new energy-efficient home constructed by an eligible contractor and acquired by a person from the eligible contractor for use as a residence during the tax year.
  • Sec. 168(l) depreciation allowance equal to 50% of the adjusted basis of qualified second-generation biofuel plant property.
  • Sec. 179D deduction for energy-efficient commercial buildings.
  • Sec. 451(k) special rule for sales or dispositions to implement Federal Energy Regulatory Commission or state electric restructuring policy for qualified electric utilities.
  • Sec. 6426(c) excise tax credits for alternative fuels and Sec. 6427(e) outlay payments for alternative fuels.

Empowerment zone tax incentives

  • Secs. 1391(d) and (h) designation of an empowerment zone and of additional empowerment zones.
  • Sec. 1394 empowerment zone tax-exempt bonds.
  • Sec. 1396 empowerment zone employment credit.
  • Sec. 1397A increased expensing under Sec. 179.
  • Sec. 1397B nonrecognition of gain on rollover of empowerment zone investments.

Other provisions

  • Sec. 954(c)(6) lookthrough treatment of payments of dividends, interest, rents, and royalties received or accrued from related controlled foreign corporations under the foreign personal holding company rules.
  • Sec. 4121 Black Lung Disability Trust Fund increase in excise tax on coal.
  • Sec. 4611 Oil Spill Liability Trust Fund financing rate.
  • Various provisions modifying the excise tax rates on beer, wine, and distilled spirits, and other rules under Secs. 263A(f)(4), 5001, 5041, 5051, 5212, and 5414.
  • The American Samoa economic development credit (P.L. 109-432, as amended by P.L. 111-312).

source: https://www.thetaxadviser.com/news/2020/dec/tax-provisions-expiring-in-2020.html

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