Senate passes Tax Extender Package at 11th hour

Ballard Spahr LLP
Contact

The Senate passed the “Tax Increase Prevention Act of 2014″ (H.R. 5771) on Tuesday night just before Congress adjourned for 2014. As Molly Bryson described in her December 5, 2014 post following the House’s passage of the bill, the tax extenders package provides a one-year retroactive extension of certain tax provisions that expired at the end of 2013. Some specific extensions that are of interest to the tax credit community include the following:

  • extension of 9% tax credit floor for low-income housing tax credit allocations made prior to January 1, 2015
  • extension of $3.5 billion in allocating authority for new markets tax credits for the calendar year 2014 round
  • extension of the production tax credit for wind and certain other renewable energy projects that begin construction in 2014
  • extension of 50% bonus depreciation for certain new equipment placed in service in 2014 (2015 for certain longer period production property)

The extent to which this legislation is beneficial really depends on the type of tax incentive involved. This is a boon for the new markets tax credit community, because it guarantees another full $3.5 billion round of funding. The benefit to renewable energy projects is less clear, as eligibility for the production tax credit is subject to a year-end construction commencement deadline. It’s also not clear how many affordable housing projects will really benefit from a 9% credit floor this late in the tax credit allocation season. In any event, January 1, 2015, when these tax extenders expire, is going to feel a lot like January 1, 2014. It will be interesting to see if this two-week extenders package becomes the poster child for the need for permanent tax reform.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations. Attorney Advertising.

© Ballard Spahr LLP

Written by:

Ballard Spahr LLP
Contact
more
less

PUBLISH YOUR CONTENT ON JD SUPRA NOW

  • Increased visibility
  • Actionable analytics
  • Ongoing guidance

Ballard Spahr LLP on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide