On February 9, Congress passed, and the President signed into law, H.R. 1892, the “Bipartisan Budget Act of 2018” or the “BBA” (the Budget Act, P.L. 115-123). The primary purpose was to provide a continuing resolution to fund the federal government through March 23. The BBA contained a number of tax provisions, too.
The BBA retroactively extends through 2017 over 30 so-called “extender” provisions. It extended three individual provisions. Twelve of those “extenders” are business provisions, primarily involving fairly narrow applications of credits and deductions. Seventeen energy provisions were extended through 2017. One business provision, involving certain excise taxes on rum, is extended for five years. Energy investment credits under Code Section 48 are extended for five years and phase out.
The BBA provides a number of miscellaneous “non-extender” tax-related provisions. Two of the provisions are changes to the massive tax reform bill enacted in December 2017. One change addresses the new benefits available for investments in “Qualified Opportunity Zones” (extending the qualified opportunity zone designation to all low-income communities in Puerto Rico). Another change clarifies the definition of the private colleges and universities that may be subject to the new 1.4% excise tax on net investment income. Twelve other miscellaneous substantive and procedural changes that are relatively narrow in application are included in the BBA.
The BBA includes tax relief (for the most part) for victims of certain disasters that occurred in 2017. The BBA includes a number of fairly far-reaching provisions that aid victims of the California wildfires. It also has two provisions addressing the victims of Hurricanes Harvey, Irma and Maria.
While generally fairly narrow in scope, some of the provisions could affect your 2017 tax return. If you have any questions, please contact your HM&M tax advisor.
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