New law ahead road sign

By:  Amanda Wilson

It looks like Congress will be delivering an early Christmas present. in the form of permanent extenders package.  The Protecting Americans from Tax Hikes Act of 2015 (“PATH Act”) is expected to be approved by Congress this week.

The PATH Act will make permanent extenders such as earned income tax credit, the child tax credit, the American opportunity tax credit (for college tuition), the research credit, the ability to deduct state and local sales tax, Section 179 expensing , and the subpart F active financing exception.  The PATH Act also permanently reduces the 10 year built-in gain period for S corporations to 5 years.

While not made permanent, the PATH Act also provides for longer extensions (through 2019) of the new markets tax credit, the work opportunity tax credit, and bonus depreciation.

The PATH Act will also delay for two years the “Cadillac tax” imposed under the Affordable Care Act on certain employer-sponsored health insurance plans.  In addition, any Cadillac Tax paid will be deductible against income tax.

Update – The PATH Act was enacted into law on Friday, December 18th.