House Committee on Ways and Means Chairman Kevin Brady rolled out legislation Monday evening aimed at renewing tax breaks for two years as negotiators continue to hash out a plan making some of the extenders permanent.
In addition to extending the expired provisions retroactively until 2016, the Tax Increase Prevention and Real Estate Investment Act of 2015 makes several modifications and adds a few new provisions to the repertoire.
Under the legislation, employers of any size will be able to receive the employer wage credit for employees called to active military duty, a deduction currently only available to companies with 50 employees or less.
The measure tweaks the research and development tax credit, increasing the alternative simplified credit from 14 to 20 percent. Small businesses will also now be able to claim both the alternative minimum tax liability and payroll tax liability.
A modification to the work opportunity tax credit will increase to 40 percent of the first $6,000 of wages for employers who hire long-term unemployed candidates.
Both elementary and secondary teachers will receive a break on certain expenses, the deduction will be tweaked to index the $250 cap to inflation.
Spin-off companies will not be allowed to convert into Real Estate Investment Trusts (REIT) for a decade. REITs generally aren’t subjected to corporate income taxes and distribute at least 90 percent of taxable income to shareholders.
The bill will also redefine hard cider, classifying it as a wine to lower an excise tax on the beverage.
In the wake of an IRS scandal involving the alleged targeting of conservative groups applying for tax exempt status, the legislation includes several provisions to prevent a similar situation in the future.
The bill will force the agency to fire employees using their post for political purposes, for example someone who issues an audit on an organization based on its ideological leanings.
It will prohibit employees at the IRS from using personal accounts for official business — a concern after it was discovered ex-IRS official Lois Lerner was using a private email account for work purposes.
The bill is slated to be voted on before Congress leaves from recess at the end of the week.
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