Congress Approves One-Year Tax Extenders Package
December 18, 2014
This month Congress passed a one-year renewal of more than 50 individual and business tax breaks that expired at the end of 2013. It first passed in the House Dec. 3 by a bipartisan vote of 378-46, the measure would extend nearly all of the tax breaks until just the end of 2014, at a cost of almost $42 billion. The list of incentives extended by the House included the R&D tax credit, Sec. 179 (with an increased expensing limit) and bonus depreciation. Other incentives in the package are more controversial, particularly a tax credit prized by the wind industry.
House Republicans moved to the one-year extension package after talks between Senate Majority Leader Harry Reid (D-Nev.) and Ways and Means Committee Chairman Dave Camp (R-Mich.) over the broader deal broke down before Thanksgiving following a veto threat from President Obama. The White House and other Democrats objected to the broader proposal because it wouldn’t permanently extend two tax credits for the working poor: the Earned Income Tax Credit and the Child Tax Credit.
AFS and industry state groups joined with 500 other organizations in a letter sent to Congress the week of November 17 urging lawmakers to pass “tax extenders” legislation before the end of the year. Some lawmakers suggested punting on the tax extenders until January when the new 114th Congress was sworn-in, which would have created huge uncertainty for metalcasting facilities trying to file their 2014 taxes. Some efforts have been made earlier this year to make permanent the R&D tax credit and bonus depreciation instead of the on-again, off-again style of legislating on a temporary basis.