Sorry had to get through 1,000 pages of spending provisions
Green tax credits 
Including 45Q credit for carbon sequestration
and hydrogen
Electric vehicle tax credit, including extra $4,500 if assembled domestically using union labor
Restoring bicycling to the tax exclusion for commuter expenses, and including scooters and bikeshare in the definition. $81 per month
Tax credit for buying an electric bicycle
Clean electricity credit
Expanded child tax credit extended by just 1 year, through 2022.
No work requirements.
Refundability made permanent.
No work requirements.
Refundability made permanent.
Expanded EITC for childless filers extended by one year, through 2022. Amount will adjust for inflation.
Messing up the EITC calculation will be treated as a mathematical/clerical error (as opposed to something that triggers an audit)
15% alternative minimum tax on profits as reported on financial statements, for corporations with at least $1 billion in annual financial statement income for a 3-year period.
(Treasury: would apply to ~180 corps and (absent behavioral changes) result in a tax increase for 45.)
(Treasury: would apply to ~180 corps and (absent behavioral changes) result in a tax increase for 45.)
Side note: I wonder if there will be greater interest in being on the Financial Accounting Standards Board, a private entity of seven people that decide what book income and generally accepted accounting principles are. We're basically adopting their work in the federal tax code!
Carryforward of losses allowed for corporate AMT.
AMT incorporates a bunch of the same credits that corps use to pay zero under the regular tax!
Notably not included is expensing for immediate business investment.
AMT incorporates a bunch of the same credits that corps use to pay zero under the regular tax!
Notably not included is expensing for immediate business investment.
1% excise tax on stock buybacks
(Corps can retain profits, spend them, distribute dividends to shareholders, or buy back stock from shareholders. This joins various tax provisions seemingly designed to deter all of those options.)
(Corps can retain profits, spend them, distribute dividends to shareholders, or buy back stock from shareholders. This joins various tax provisions seemingly designed to deter all of those options.)
Tax rate on FDII of 15.792% (21% x .248). Compares to 13.125% now and 20.7% in the House Dem proposal.
Oh same section - GILTI tax rate goes to 15.015% (21% - (21% x .285)), up from 10.5% currently and compared to 16.6% in House Dem proposal.
Also the formula on FDII above should be (21% - (21% x .248), oops. Result is correct, I just didn't write the formula correctly.
Also the formula on FDII above should be (21% - (21% x .248), oops. Result is correct, I just didn't write the formula correctly.
FDII/GILTI changes effective 2023 (House Dem plan had 2022).
Foreign tax credit carryforward limited to 5 years, through 2030.
QBAI goes from 10% to 5%
Foreign tax credit "haircut" for GILTI calculation goes from 20% to 5%.
BY WHOM.
The Base Erosion & Anti-Abuse Tax (BEAT) goes up to:
10% in 2022-23
12.5% in 2023
15% in 2024
18% in 2025 onward
The House Dem draft had it topping at 15% from 2026 onward
10% in 2022-23
12.5% in 2023
15% in 2024
18% in 2025 onward
The House Dem draft had it topping at 15% from 2026 onward
Includes digital assets (crypto) in constructive sales rules, regarding offsetting sales that limit or transfer taxable gain.
Includes currency, commodities, and digital assets (crypto) in wash sale anti-abuse rule.
Delays repeal of research and development (R&D) expensing (changing from expensing to 5-year amortization) from 12/31/21 to 12/31/25.
Applies net investment income tax (NIIT, the 3.8% substitution for Medicare payroll tax on high-income individuals) to net investment income from trade or business activity. Effective 1/1/22.
Surtax on high-income individuals. 5% on modified AGI exceeding $10 million, and a further 3% modified AGI exceeding $25 million.
This is on top of all other taxes.
Modified AGI is AGI minus 163(d) investment interest. Therefore most deductions cannot be taken against this tax.
This is on top of all other taxes.
Modified AGI is AGI minus 163(d) investment interest. Therefore most deductions cannot be taken against this tax.
$80 billion for the IRS:
- $1.9315 billion to improve assistance and education services
-$44.8875 billion for increased enforcement
-$27.3763 billion for operations and tech upgrades
-$4.7507 billion for callback technology
- $1.9315 billion to improve assistance and education services
-$44.8875 billion for increased enforcement
-$27.3763 billion for operations and tech upgrades
-$4.7507 billion for callback technology
Plus $403m for IRS Inspector General, $104m for Treasury, $153m for Tax Court.
IRS is directed to develop a plan on how they'll spend all this money. (@NTU has criticized that the IRS has submitted no plan and they're getting money anyway.)
IRS is directed to develop a plan on how they'll spend all this money. (@NTU has criticized that the IRS has submitted no plan and they're getting money anyway.)
$15 million to produce a report on free efiling of tax returns. Money must be spent by 9/30/23.
A promise that none of the added IRS funding is intended to increase taxes on those making less than $400,000.
Backup withholding required by third party networks reporting payments of at least $600. I had noted this dealt with Venmo, PayPal, etc., but gig companies are saying it applies to them.
It is *not* the bank reporting proposal, which is not in the bill now.
It is *not* the bank reporting proposal, which is not in the bill now.
Repeals requirement that IRS supervisors approve all assessments of penalties. Substitutes with a quarterly letter by IRS supervisors certifying their employees are following rules.
We at @NTUF flagged this as a concern, and they have modified it to apply only going forward.
We at @NTUF flagged this as a concern, and they have modified it to apply only going forward.
(this provision is still retroactive to 1/1/2001 but explicitly now only affects penalties prospectively)
Miscellaneous provisions carried over from the earlier bill
That's it! /fin
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