The Senate Finance Committee passed by a 23-to-3 vote Tuesday a package of more than 50 tax extenders that includes a two-year extension for tax-free charitable contributions from IRAs, tax deduction for qualified higher education expenses and a bonus depreciation extension.
Senate Finance Committee Chairman Orrin Hatch, R-Utah, along with ranking member Ron Wyden, D-Ore., said in a joint statement that the bipartisan bill passed Tuesday aims to help both families and businesses, and that the committee “succeeded in passing a number of widely supported tax provisions that will provide some certainty in the tax code for the next two years.”
The tax breaks, known as tax extenders, were renewed in December retroactively for the 2014 tax year.
Hatch stated that the “bulk of the extenders” in the package go toward “very popular, widely applicable provisions.” To be exact, he said, “51% of the dollars at play in this bill can be attributed to the following provisions: the research and development tax credit, small-business expensing, the state and local sales tax deduction, bonus depreciation, and active financing income.”
The bill extends for two years the provision that permits an IRA owner who is 70-1/2 or older generally to exclude from gross income up to $100,000 per year in distributions made directly from the IRA to certain public charities.
The bill also makes two changes to bonus depreciation. It extends 50% bonus depreciation to qualified property purchased and placed in service before Jan. 1, 2017 (before Jan. 1, 2018 for certain longer-lived and transportation assets), and makes a conforming change to the percentage of completion rules for certain long term contracts.
The bill also extends for two years taxpayers’ option to forgo bonus depreciation in favor of accelerating corporate Alternative Minimum Tax (AMT) credits acquired in tax years prior to 2006.