Congress is embracing the holiday season by providing taxpayers a gift in the form of tax extenders. The Protecting Americans from Tax Hikes (PATH) Act of 2015 is a bipartisan agreement between both houses of Congress that permanently extends many popular business and individual incentives. President Obama is expected to sign into law in the coming days. Below are some key provisions from the PATH Act:
- R&D Tax Credit Made Permanent & Modified
The provision permanently extends the Research and Development (R&D) Tax Credit. Additionally, beginning in 2016, eligible small businesses ($50 million or less in gross receipts) may claim the credit against their alternative minimum tax (AMT) liability, and the credit can be utilized by eligible small businesses against their payroll tax (i.e., FICA) liability.
KBKG Insight: The new provisions provide substantial benefits to qualifying small and mid-sized businesses. Historically, taxpayers that were in AMT positions or may not have had income tax liability have not been able to use the credit. The new provisions in the PATH Act significantly increases the number of taxpayers that can benefit from the credit. » Find if you can benefit with the new R&D Tax Credit
- §179D Energy Efficiency Deductions Extended for Commercial Buildings through 2016
Deductions of up to $1.80 per square foot for energy efficient commercial building property would be extended for 2 more years through the end of 2016. Designers of government-owned buildings remain eligible for these deductions as well. » Find out if you qualify
- §45L Energy Efficiency Credits Extended for Multifamily & Residential Developers through 2016
Low-rise apartment developers and homebuilders are eligible for a $2,000 tax credit for each new or rehabbed energy efficient dwelling unit that is first leased or sold by the end of 2016. Taxpayers also have the ability to amend returns to claim missed tax credits from previous years.
» Find out if you qualify
- Bonus Depreciation Extended & Phased Down through 2019
50% Bonus Depreciation provisions would be extended through the end of 2017 and phases down to 40% in 2018 and 30% in 2019.
» Find out the tax benefits you get from your building & improvements
- §179 Expensing Thresholds & 15-Year Life for Qualified Real Property Made Permanent
Section 179’s increased expensing amounts for small businesses have been made permanent. Additionally the 15-year recovery period for qualified leasehold improvement property, qualified restaurant property, and qualified retail improvement property has been made permanent, and qualified property here may be eligible for expensing under the special rules of Section 179. » Find out the tax benefits you get from your building & improvements
- Hiring & Employment Credits Extended
Work Opportunity Tax Credits are extended through 2019. Empowerment Zone Tax Incentives would be extended through the end of 2016. » Find out if you qualify
For the complete text of the bill, read the PATH Act of 2015.
KBKG’s multi-disciplinary team of tax experts and engineers can help taxpayers and their CPAs capitalize on the latest tax extenders. To learn how R&D Tax Credit, Cost Segregation, Green Building Tax Incentives, and Hiring Tax Credits can benefit you, please call us today.
Authors: Kevin Zolriasatain | CJ Aberin, CCSP