Small Business Taxes & Management

Special Report

Tax Provisions Expiring Through 2018


Small Business Taxes & ManagementTM--Copyright 2012, A/N Group, Inc.


We've reproduced a list of expiring (2012-2018) tax provisions. Most expire at the end of the year, but a few expire mid-year.


Provisions Expiring in 2012

1. Airport and Airway Trust Fund excise taxes:

a. All but 4.3 cents-per-gallon of taxes on noncommercial aviation kerosene and noncommercial aviation gasoline (sec. 4081(d)(2)(B))

b. Domestic and international air passenger ticket taxes (sec. 4261(j)(1)(A)(ii))

c. Air cargo tax (sec. 4271(d)(1)(A)(ii))

2. Temporary payroll tax cut (sec. 101 of Pub. L. No. 112-78) (12/28/12) 3. Highway Trust Fund excise tax rates:
a. All but 4.3 cents-per-gallon of the taxes on highway gasoline, diesel fuel, kerosene, and alternative fuels (secs. 4041(a) and 4081(d)(1))

b. Reduced rate of tax on partially exempt methanol or ethanol fuel (sec. 4041(m))

c. Tax on retail sale of heavy highway vehicles (sec. 4051(c))

d. Tax on heavy truck tires (sec. 4071(d))

e. Annual use tax on heavy highway vehicles (sec. 4481(f))

4. Leaking Underground Storage Tank Trust Fund financing rate (secs. 4041(d)(4) and 4081(d)(3))

5. Qualified green buildings and sustainable design project bonds (sec. 142(l)(8))

6. Increase of the size of 15 percent rate bracket for married filers to double that of unmarried filers (sec. 1(f)(8) and sec. 901 of Pub. L. No. 107-16)

7. Reduced capital gain rates for individuals (secs. 1(h), 55(b), 57(a)(7), 1445(e)(1), 7518(g)(6)(A) and sec. 303 of Pub. L. No. 108-27)

8. Dividends of individuals taxed at capital gain rates (secs. 1(h)(11), 163(d)(4)(B), 854(a) and (b), and 857(c) and sec. 303 of Pub. L. No. 108-27)

9. Ten percent individual income tax rate (sec. 1(i) and sec. 901 of Pub. L. No. 107- 16)

10. Reduction in other individual income tax rates: size of 15 percent rate bracket modified to reflect 10 percent rate, and 28 percent, 31 percent, 36 percent, and 39.6 percent rates are reduced to 25 percent, 28 percent, 33 percent, and 35 percent, respectively (sec. 1(i)(2) and sec. 901 of Pub. L. No. 107-16)

11. Dependent care credit: increase of dollar limit on creditable expenses from $2,400 to $3,000 ($4,800 to $6,000 for two or more children), increase of applicable credit percentage from 30 to 35 percent, increase of beginning point of phase-out range from $10,000 to $15,000 (secs. 21(a)(2) and 21(c) and sec. 901 of Pub. L. No. 107-16)

12. Adoption credit and adoption assistance exclusion: increase to $10,000 for maximum credit and maximum exclusion, special needs adoptions deemed to have $10,000 eligible expenses for purposes of credit and exclusion, increase the beginning and ending points of phase-out range for credit and exclusion, allow the credit against AMT (secs. 23 and 137 and sec. 901 of Pub. L. No. 107-16)

13. Child credit: increase from $500 to $1,000, expand eligibility for refundable portion of the credit, AMT relief, provide that child credit not treated as income or resources for purposes of benefit or assistance programs financed in whole or in part with Federal funds (secs. 24(a), (b)(3), and (d) and secs. 203 and 901 of Pub. L. No. 107-16)

14. American opportunity tax credit (sec. 25A(i))

15. Earned income tax credit ("EITC"): increase in the beginning point of the phase-out range for joint returns, modification of EITC treatment of amounts not includible in income, repeal of reduction of EITC for AMT liability, expansion of math error authority (secs. 32(b)(2), (c)(2)(A)(i), (h), and 6213(g)(2) and sec. 901 of Pub. L. No. 107-16)

16. Earned income tax credit:

a. Credit percentage of 45 percent for three or more qualifying children (sec. 32(b)(3)(A))

b. Phaseout threshold for marriage penalty relief (sec. 32(b)(3)(B))

17. Cellulosic biofuel producer credit (sec. 40(b)(6)(H))

18. Placed-in-service date for wind facilities eligible to claim electricity production credit (sec. 45(d))

19. Credit for production of Indian coal (sec. 45(e)(10)(A)(i))

20. Credit for employer-provided child care (sec. 45F and sec. 901 of Pub. L. No. 107- 16)

21. Election to claim the energy credit in lieu of the electricity production credit for wind facilities (sec. 48(a)(5))

22. Work opportunity tax credit targeted to hiring qualified veterans (sec. 51(c)(4)(B))

23. Credit for prior year minimum tax liability made refundable after period of years (sec. 53(e))

24. Increase of the standard deduction for married filers to double that of unmarried filers (sec. 63(c)(2)(A) and sec. 901 of Pub. L. No. 107-16)

25. Repeal of overall limitation on itemized deductions (the "Pease limitation") (sec. 68(g) and sec. 901 of Pub. L. No. 107-16)

26. Discharge of indebtedness on principal residence excluded from gross income of individuals (sec. 108(a)(1)(E))

27. Elimination of tax on awards under the National Health Service Corps Scholarship Program and the F. Edward Hebert Armed Forces Health Professions Scholarship and Financial Assistance Program (sec. 117(c)(2) and sec. 901 of Pub. L. No. 107- 16)

28. Employer-provided educational assistance: expansion to graduate education and making the exclusion permanent (sec. 127(c)(1) and sec. 901 of Pub. L. No. 107-16)

29. Tax-exempt bonds for educational facilities: increase in amount of bonds qualifying for small-issuer arbitrage rebate exception, expansion of tax-exempt bond treatment to public school facilities (secs. 142(a)(13) and (k), 148(f)(4)(D)(vii) and sec. 901 of Pub. L. No. 107-16)

30. Repeal of the personal exemptions phase-outs ("PEP") for high-income taxpayers (sec. 151(d)(3)(F) and sec. 901 of Pub. L. No. 107-16)

31. Additional first-year depreciation for 50 percent of basis of qualified property (secs. 168(k)(1) and (2))

32. Election to accelerate AMT credits in lieu of additional first-year depreciation (sec. 168(k)(4))

33. Special depreciation allowance for cellulosic biofuel plant property (sec. 168(l))

34. Increase in dollar limitations for expensing to $125,000/500,000 (indexed) (secs. 179(b)(1) and (2), (c)(2), and (d)(1)(A)(ii))

35. Student loan interest deduction: increase and indexation for inflation of the phase-out ranges, repeal of the limit on the number of months that interest payments are deductible, repeal of the rule that voluntary payments of interest are not deductible (sec. 221 and sec. 901 of Pub. L. No. 107-16)

36. Repeal of collapsible corporation rules (sec. 341 and sec. 303 of Pub. L. No. 108- 27)

37. Education Individual Retirement Accounts (Coverdell education savings accounts): increase of maximum annual contribution from $500 to $2,000, expansion of definition of qualified education expenses, increase in the size of the phase-out range for married filers to double that of unmarried filers, provision of special needs beneficiary rules, contributions by corporations and other entities, and contributions until April 15th, permitted (secs. 530(b)(1), (b)(2), (b)(4), (c)(1), (d)(2) and sec. 901 of Pub. L. No. 107-16)

38. Reduced rates under accumulated earnings tax and personal holding company tax (secs. 531 and 541 and sec. 901 of Pub. L. No. 107-16)

39. Modified tax treatment of electing Alaska Native Settlement Trusts and their beneficiaries (sec. 646 and sec. 901 of Pub. L. No. 107-16)

40. Estate, gift, and generation skipping transfer tax provisions (sec. 901 of Pub. L. No. 107-16):

a. Reduction in the maximum estate and gift tax rate to 35 percent (secs. 2001 and 2502)

b. Modifications of estate and gift taxes to reflect differences in credit resulting from different tax rates (secs. 2001(b)(2), 2001(g), and 2505(a))

c. Increase in estate and gift tax exemption to $5 million (indexed for inflation in years after 2011) (sec. 2010)

d. "Portability" rules permitting a surviving spouse to use the deceased spousal unused exclusion amount (sec. 2010(c))

e. Estate tax deduction for State death taxes paid (secs. 2011, 2053, 2058, 2102, 2106, and 2604)

f. Expansion and clarification of estate tax conservation easement rules (secs. 2031(c)(2) and (c)(8)(A)(i))

g. Repeal of the qualified family-owned business deduction (sec. 2057)

h. Modifications to generation-skipping transfer tax rules regarding deemed allocations of exemption to certain transfers in trust, severing of trusts, valuation, and relief for late elections (secs. 2632(c) and 2642(a)(3), (b)(1), and (b)(2)(A))

i. Modifications to estate tax installment payment rules (secs. 6166(b)(1)(B)(ii), (b)(1)(C)(ii), (b)(8)(B), (b)(9)(B)(iii)(I), and (b)(10))

41. Refunds disregarded in the administration of Federal programs and Federally assisted programs (sec. 6409)


Provisions Expiring in 2013

1. Credit for health insurance costs of eligible individuals (sec. 35(a))

2. Determination of low-income housing credit rate (sec. 42(b)(2))

3. Placed-in-service date for facilities (other than wind facilities) eligible to claim the electricity production credit (sec. 45(d))

4. Election to claim the energy credit in lieu of the electricity production credit for renewable power facilities other than wind facilities (sec. 48(a)(5))

5. Three-year depreciation for race horses two years old or younger (sec. 168(e)(3)(A))

6. Placed-in-service date for partial expensing of certain refinery property (sec. 179C(c)(1))

7. Energy efficient commercial buildings deduction (sec. 179D(h))

8. Transfer of excess pension assets to retiree health accounts (sec. 420(b)(5))


Provisions Expiring in 2014

1. Incentives for alternative fuel and alternative fuel mixtures involving liquefied hydrogen:

a. Excise tax credits and outlay payments for liquefied hydrogen (secs. 6426(d)(5) and 6427(e)(6)(D))

b. Excise tax credits and outlay payments for liquefied hydrogen fuel mixtures (secs. 6426(e)(3) and 6427(e)(6)(D))

2. Alternative motor vehicle credit for qualified fuel cell motor vehicles (sec. 30B(k)(1))

3. Alternative fuel vehicle refueling property (hydrogen refueling property) (sec. 30C(g)(1))

4. Automatic amortization extension for multiemployer defined benefit pension plans (sec. 431(d)(1)(C))

5. Additional funding rules for multiemployer defined benefit pension plans in endangered or critical status (sec. 432 and

sec. 221(c) of Pub. L. No. 109-280) 6. Deemed approval of adoption, use or cessation of shortfall funding method for multiemployer defined benefit pension plans (secs. 201(b) and 221(c) of Pub. L. No. 109-280)


Provisions Expiring in 2016

1. Credit for residential energy property (sec. 25D(g))

2. Increased credit for business solar energy property (sec. 48(a)(2)(A)(i)(II))

3. Credit for hybrid solar lighting systems (sec. 48(a)(3)(A)(ii))

4. Energy credit for geothermal heat pump property, small wind property, and combined heat and power property (secs. 48(a)(3)(A)(vii), 48(c)(4), and 48(c)(3)(A)(iv))

5. Credit for business installation of qualified fuel cells and stationary microturbine power plants (secs. 48(c)(1)(D) and (c)(2)(D))


Provisions Expiring in 2017

1. Oil Spill Liability Trust Fund financing rate (sec. 4611(f)(2))


Provisions Expiring in 2018

1. Black Lung Disability Trust Fund: increase in amount of excise tax on coal (sec. 4121(e)(2))


Copyright 2012 by A/N Group, Inc. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is distributed with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional should be sought. Articles in this publication are not intended to be used, and cannot be used, for the purpose of avoiding accuracy-related penalties that may be imposed on a taxpayer. The information is not necessarily a complete summary of all materials on the subject. Copyright is not claimed on material from U.S. Government sources.--ISSN 1089-1536

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--Last Update 01/19/12