Protecting Americans from Tax Hikes Act of 2015

(“PATH Act”)

On December 18, the Senate passed the Protecting Americans from Tax Hikes Act of 2015 (“Path Act”), which the House had passed the day before. The President quickly signed the legislation into law. The Path Act addresses the 50 or so taxpayer favorable “extenders” that had expired at the end of 2014. The extenders are temporary tax provisions that are routinely extended by Congress on a one or two year basis and include both business and individual provisions. PATH makes some of these provisions permanent and extends others. Below is a list of some of the key provisions.

Provisions made permanent

  • Enhanced section 179 expensing for eligible business property purchased during the year up to $500,000 and a $2 million phase-out threshold, indexed for inflation after 2015
  • 15-year write off for qualified leasehold, retail and restaurant improvement property
  • Research Tax Credit
  • Reduction in S corporation recognition period for built-in gains tax
  • Tax free IRA contributions to charity after age 70½
  • State and local sales tax itemized deduction
  • American Opportunity Tax Credit for college tuition
  • Enhanced Child Tax Credit

Provisions extended through 2019

  • Bonus depreciation-50% for 2015-2017, 40% for 2018 and 30% for 2019
  • Work Opportunity Tax Credit
  • New Markets Tax Credit

Provisions extended through 2016

  • Exclusion for discharged mortgage debt
  • Deduction for qualified tuition and related expenses
  • Deduction for mortgage insurance premiums
  • Energy efficient commercial building deduction

Please consult your Gold Gerstein Group tax advisor for any questions or to discuss how these provisions can benefit you and your business.