The Bipartisan Budget Act of 2018 enacted this week changes the income tax law for…….2017!!! How could Washington pass legislation in February to change last year’s tax law? What about the income tax forms and software already produced – how will they cope with these changes? What were they thinking? It doesn’t matter – we have to deal with the change.
First, the changes do not affect all income tax payers or returns. We have listed the areas which will be affected below. The affected taxpayers will have to wait for the software to be updated. IF YOU ARE NOT AFFECTED BY ANY OF THE CATEGORIES BELOW, WE CAN GO FORWARD AND COMPLETE YOUR TAX RETURN WITHOUT DELAY.
- Extends exclusion from gross income of discharge of Qualified Principal Residence indebtedness
- Extends mortgage insurance premiums treated as Qualified Residence Interest through 12/31/17
- Extends above the line deduction for Qualified Tuition and related expenses through 12/31/17
- Extends the credit for Non-business Energy Property
- Extends and modifies the credit for residential energy property
- Extends the credit for new qualified fuel cell motor vehicles
- Extends the credit for alternative fuel cell motor vehicles
- Extends the credit for energy-efficient new homes
- Extends the credit and adjusts the phase-out of the energy credit
- Modifications to hardship distributions and hardship withdrawals from cash or deferred arrangements