President Obama signed on April 14 a bill (H.R. 4) to repeal controversial expanded information reporting on Form 1099 for certain business payments and rental property expense payments. The Senate passed H.R. 4 on April 5, the House had approved the bill on March 3, 2011. To offset cost of repeal, H.R. 4 increases the amount of the overpayment of the health insurance premium assistance credit that is subject to recapture.
President Obama proposed a fiscal year (FY) 2013 federal budget on February 13, 2012 containing approximately $1.5 trillion in revenue raisers. The budget reiterates the President’s longstanding opposition to extending the Bush-era tax cuts for higher income individuals, proposes to extend or make permanent a number of temporary tax credits and deductions and introduces some new tax incentives.
President Obama signed a multi-billion dollar tax cut package, the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (2010 Tax Relief Act) (P.L. 111-312), on December 17. The new law follows through on the framework agreed to December 6 by President Obama and GOP leaders in Congress. The 2010 Tax Relief Act extends the Bush-era individual and capital gains/dividend tax cuts for all taxpayers for two years. Th e bill also provides for an AMT “patch,” a one-year payroll tax cut, 100 percent bonus depreciation through 2011 and 50 percent bonus depreciation for 2012, a top federal estate tax rate of 35 percent with a $5 million exclusion, and more.
Time is almost up for the historic tax cuts enacted by the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA). Without any Congressional action, many popular tax cuts automatically disappear (“sunset”) after December 31, 2010. They will be replaced by rates, deductions, credits and other provisions based on the far less generous law in place before EGTRRA. Additionally, enhanced capital gains and dividends tax rates in the Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA) and subsequent legislation will also sunset after December 31, 2010. This CCH Tax Briefing alerts tax practitioners and their clients to what the Tax Code is scheduled to look like after EGTRRA’s and JGTRRA’s tax benefits sunset after December 31, 2010.