Proposed tax legislation and impact on tax planning 2022/2023


–(BUSINESS WIRE)–Wolters Kluwer Tax and Accounting:

What: Congress has been working on a number of tax proposals for 2022. While some tax proposals appear to have bipartisan support, Congress has primarily focused on trying to salvage at least part of the Build Back Better Bill from the last year, which requires the support of all Senate Democrats. even if it is adopted as part of the budget reconciliation. This effort is continuing and agreement has not yet been reached on several important provisions. Meanwhile, other tax laws have been put on hold as negotiations on this package continue. If passed, many of these tax proposals would impact 2023 tax planning, and some could still impact 2022 planning. Still, with Congress scheduled to adjourn for the fall elections in less than a month, time is running out to achieve many of these goals.

Why: With 2022 already more than halfway past, it is important to monitor these tax developments for possible year-end tax planning and planning for 2023. Some of the items of tax legislation under consideration include:

  • Build back better. Now shrunk from a $3.5 trillion package last year to something closer to $2 trillion, an agreement in principle has been reached on drug pricing negotiations (subject to approval of Parliament from the Senate as appropriate for a reconciliation package) and an expansion of net tax on investment income. Provisions for climate change, infrastructure, child tax credits, housing for the elderly, subsidies for electric vehicles, a minimum corporate tax, an AGI surcharge and international tax reforms are still in the works. negotiation. Senator Manchin opposes climate change provisions and corporate and personal tax increases. It is expected that if Build Back Better is passed, the new provisions will not come into effect until 2023.
  • Tax Cuts and Jobs Act. Some of the provisions of the Tax Reduction and Employment Law enacted in 2017, such as the immediate charging of research and development expenses, the amortization of 100% bonus and the calculation of the deduction limit of interest charges, must expire. Many members of Congress would like to find a way to extend these provisions.
  • Chinese Competition Law. Proposals to promote domestic production of silicon chips and other manufacturing activities deemed important to the US economy also enjoy bipartisan support. Senate Minority Leader McConnell has indicated he will try not to let it pass until Senate Democrats give up on their efforts to build back better.
  • Companies that do business with Russia. There is also bipartisan support for denying tax benefits to American companies that continue to do business with Russia after its invasion of Ukraine. This could end up generating revenue to support the provisions of Build Back Better.
  • SECURE 2.0. One version of a second tax-friendly requirement savings reform effort passed the House, and a different version passed the Senate Finance Committee. Even if the Senate adopts the Senate finance version, there are enough differences between the two versions that they probably cannot be resolved by a conference committee before the fall election.
  • US bailout credits. Administration would like to extend the American Rescue Plan Act’s one-year enhancements to the Child Tax Credit and Earned Income Tax Credit through 2022 and enhancements to the Premium Tax Credit beyond 2022. It’s not clear they can survive building back Better negotiations.
  • Expired tax provisions. Several tax provisions regularly expiring, such as the deduction of mortgage loan insurance premiums, the mortgage for non-professional energy, the credit for fuel cell vehicles, the mortgage for alternative fuel supply, the credit for two-wheeled plug-in electric vehicles and the tax on health cover credit, expired at the end of 2021. There could be an effort to extend them retroactively for 2022 if the appropriate tax vehicle emerges.

Who: Tax expert Mark Luscombe, JD, LL.M, CPA, is available to discuss tax law issues regarding these proposals, their prospects for adoption and the possible impact on tax planning.

Contact: To arrange interviews with Mark Luscombe or other Wolters Kluwer Tax & Accounting state or federal tax experts on this or any other tax-related topic, please contact:


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