On Tuesday December 16th, the Senate passed H.R.5771 to extend several expired tax provisions and President Obama is expected to sign it into law in the coming days. The extension is retroactive from January 1, 2014, through the end of this year with minimal changes to the prior tax provisions.

H.R.5771 was originally passed by the House on December 3, 2014 and sent to the Senate for consideration. While the expectation was for a quick turnaround from the Senate, taxpayers were left in limbo with the expiration of important provisions such as the research and development tax credit, accelerated depreciation for certain types of property, energy incentives, the deduction of mortgage insurance premiums, the deduction of state and local sales tax, and a host of others items.

Following is a synopsis of some of the key provisions from H.R.5771:

  • R&D Tax Credit - Extended through Dec 31, 2014
    The federal credit yields a net benefit of approximately 6.5% of every qualified dollar with many states also offering incentives. Qualifying industries include Manufacturing, Software, Pharmaceutical, Agriculture, Food Science, Telecommunications, Chemical, and many more… » Find out if you qualify
  • §179D Energy Efficiency Deductions for Commercial & Government Buildings –
    Extended through Dec 31, 2014

    This tax deduction is worth up to $1.80 per square foot for energy efficient improvements to commercial buildings and government buildings. Taxpayers that completed improvements from 2006-2014 may be eligible for these deductions. Architects & engineers that have designed government buildings constructed in 2011-2014 may also qualify. » Find out if you qualify
  • §45L Energy Efficiency Credits for Multifamily & Residential Developers -
    Extended through Dec 31, 2014

    $2,000 tax credit for every new energy efficient dwelling unit that is first leased or sold from 2011-2014. Apartment developers, Senior living, and Homebuilders are eligible. » Find out if you qualify
  • Bonus Depreciation & §179 Expensing provisions – Extended through Dec 31, 2014
    This extension allows taxpayers to claim a 50% first year bonus depreciation deduction for qualified property placed in service before January 1, 2015 (January 1, 2016 for certain property). The Section 179 limit is $500,000 for 2014 with a $2 million investment limit.
    » Find out the tax benefits you get from your building & improvements
  • 15-year Life for Qualified Real Property - Extended through Dec 31, 2014
    This extension applies to qualified leasehold improvement property, qualified restaurant property, and qualified retail improvement property placed in service in 2014. Taxpayers can elect to treat up to $250,000 of these Qualified Improvements as Section 179 property.
    » Find out the tax benefits you get from your building & improvements
  • Work Opportunity Tax Credit – Extended through Dec 31, 2014
    Employers that hire qualified individuals may be eligible for credits for employees who begin work in 2014. » Find out if you qualify

For the complete list of extended provisions, go to Congress.gov H.R.5771.

KBKG's multi-disciplinary team of tax experts and engineers can help taxpayers & their CPAs capitalize on the latest tax extenders. To learn how R&D Tax Credits, Cost Segregation, Green Building Tax Incentives, and Hiring Tax Credits can benefit you, please call us today.