Lawmakers Moving Toward Resolution on Tax Extenders
With potentially only five legislative days remaining before Congress is scheduled to adjourn for the year, tax-writers and congressional leaders are continuing their work to finalize a tax extenders package, with the House having scheduled time to vote on potential legislation this week. Thus far, Republicans and Democrats have made significant progress and come to agreement on most issues and are reportedly working through a few remaining sticking points on a package of tax provisions that would cost upwards of $800 billion. Still, issues remain to be resolved.
In particular, the major points of contention that remain relates to indexing the Child Tax Credit (CTC) for inflation and implementing stricter anti-fraud provisions. Indexing the CTC has thus far proven to be controversial, as it would add an additional $70 billion to the cost of an already expensive bill. Moreover, before Republicans would be willing to agree to make either the CTC or the Earned Income Tax Credit permanent, they will require that stricter anti-fraud provisions be put in place. Many Democrats, however, have pushed back against the idea, suggesting that such restrictions are not necessary. Nevertheless, with time running out and significant work remaining to be done on the omnibus spending bill, there remains skepticism that a big deal is possible, with lawmakers very possibly being forced to instead pass yet another short-term extension.
Dividend Equivalent Rules Delayed
Given the amount of work that would be required to build an effective system to implement dividend equivalent rules, Treasury and the Internal Revenue Service (IRS) last week issued correcting amendments to the regulations, eliminating the 2016 effective date. Instead, the rules will now be applicable to all contracts in 2017.