On March 9, 2023, President Biden released his FY 2024 budget (and related docs) and Greenbook that describes his tax proposals. It repeats many proposals that were in his FY2022 and/or FY 2023 Greenbooks (see comparison and links here for the FY22 and FY23 plans).Themes, similar to recent years, include increasing corporate taxes such as increasing the 21% corporate
Latest from 21st Century Taxation
Residential Energy Credit Observations & Cautions
First, a policy query: How long should tax incentives be in the law. For example, with the Inflation Reduction Act of 2022, Congress extended the residential energy credits of §25C and §25D through 2032 and 2034, respectively. The §25C credit was first added to the law in 1978 (as §44C by the Energy Tax Act of 1978, P.L. 95-618 (11/9/78)).Section 25C
ChatGPT and the Tax Law
We all know tax rules are complex. Can artificial intelligence such as used in ChatGPT address tax matters? I gave it a try today while listening to some colleagues deliver an online chat about the abilities and limitations of ChatGPT. I tried two prompts with it which I summarize below with some commentary. Spoiler alert – the 2nd prompt led
More on California MIddle Class Tax Refund
Here is my 3rd post on the payments California issued to probably over 90% of Californians per AB 192 (2022) (1/29/23 + 7/10/22). And others have blogged on it as well. On February 3, Procedurally Taxing had a post from Bob Kammen asking why the IRS hasn’t issued guidance. Bob also makes a comment about the high income
Are special state tax refunds taxable? Maybe; it depends!
For COVID relief, both the federal government and some state governments had funds for individuals/households. Congress created Economic Impact Payments (recovery credits) which were specified as not taxable and states followed that. Some states such as California had additional relief such as the Golden State Stimulus payments where were labeled as a one-time tax refund and available only to individuals
Oddities of No §174 R&D Fix in 2022
I thought Congress would repeal or extend the Tax Cuts and Jobs Act of 2017 delayed change to §174 that changes from expensing R&D (the law since 1954) to capitalizing and amortizing over 5 years (domestic) or 15 years (foreign). After all, a key purpose of the TCJA was to make our tax system more internationally competitive. Providing a more
Another Change for Filing Form 1099-K
The American Rescue Plan Act of 2021 (P.L. 117-2, 3/11/21) lowered the filing threshold for Form 1099-K by third-party settlement organizations (TPSO). Since first enacted in 2008, IRC §6050W had a de minimis exception for third-party settlement organizations (such as PayPal) where they only had to issue a 1099-K to the IRS and customer if they processed over
5th Anniversary of Tax Cuts and Jobs Act – 12/22/22
The Tax Cuts and Jobs Act (P.L. 115-97) was signed into law on December 22, 2017. This was a budget reconciliation bill so only needed 51 votes in the Senate rather than 60. Among many things, this means the official name of the bill has the word “reconciliation” in it (an act to provide for reconciliation pursuant to
Dollar Amounts and MAGI in the IRC – Are Adjustments Needed?
There are many dollar amounts in IRC sections such as for amounts of deductions, credits or exemptions, as well as for phase-out levels. The Inflation Reduction Act modifies section 30D, Clean Vehicle Credit, and adds section 25E, Previously Owned Clean Vehicle Credit. Both of these provisions have phaseout levels based on “modified AGI” and dollar limits on the cost
Information Security and the Clean Vehicle Credit
The Inflation Reduction Act of 2022 added and modified several energy credits. They are all fairly complex in terms of restrictions and numerous definitions. See prior posts on some of this complexity:Section 30C Refueling Property Credit (9/18/22)Various credits with track changes links to several including the section 30D Clean Vehicle Credit (8/21/22)One item that seems odd in the
