Home For The Holidays With Tax Homework?
Can a tax deal happen before Jan. 19? The House returned home last week, with the Senate soon to follow. Tax legislation could be on the horizon when Congress returns in January. As Politico reports, if lawmakers want to expand Child Tax Credit benefits (presuming Democrats settle on an expansion plan) or add tax incentives for affordable housing, they have to reach an agreement before Jan. 19, the first of two federal funding deadlines.
Treasury clarifies rules for the IRA’s 15 percent corporate alternative minimum tax. The guidance on the tax established with the Inflation Reduction Act (IRA), released Friday, stipulates that Treasury will ignore dividends a US parent company receives from subsidiaries when calculating book tax liability to prevent double taxation. The guidance also explains which consolidated financial statement a company should use when calculating the minimum tax. Treasury’s release offers interim instruction before full regulations on the tax go into effect.
New IRS guidance for IRA’s aviation fuel credit is out, too. The guidance pertains to the sustainable aviation fuel credit, which applies to certain sales involving sustainable aviation fuel in calendar years 2023 and 2024. To qualify for the credit, the fuel must provide at least a 50 percent reduction in lifecycle greenhouse gas emissions. There is a supplemental credit of one cent for each percent that the reduction exceeds 50 percent, with a maximum increase of $0.50.
Tougher sourcing requirements mean more EV buyers might be out of tax credit luck. The New York Times reports on electric vehicle (EV) models and whether they qualify for the $7,500 tax credit under IRA rules. New rules go into effect on New Year’s Day that disqualify vehicles containing components made in China or made elsewhere by a firm under the control of the Chinese government. EV sales growth has already been slowing, due to high interest rates and the perceived availability of charging stations.
What seems a small move for sports franchises could be a huge cost for the Washington, DC, region. TPC’s John Buhl examines the economic development plan for Alexandria, Virginia, hatched by Monumental Sports CEO Ted Leonsis and Virginia Gov. Glenn Youngkin (R). While they tout the plan’s potential for job growth and investment, John writes that the “plan could possibly disrupt the local job market, public transportation, and commercial real estate, and leave the entire DC region worse off than before.”
Oregon’s “kicker” raises questions about tax rebate laws. Oregon will have to return $5.6 billion to taxpayers next year, thanks to its “kicker” refund law. The law goes into effect whenever individual income taxes (and some other levies) are at least 2 percent above what state economists forecasted in the two-year budget. However, as TPC’s Lucy Dadayan mentions, predicting personal income taxes is “becoming increasingly difficult for revenue forecasters around the nation. In general, the forecasting errors are becoming larger.”
The Daily Deduction will next post on Tuesday, Jan. 2. Happy Holidays!
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