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William Byrnes (Texas A&M) tax & compliance articles

TaxFacts Intelligence: December 19, 2022

Posted by William Byrnes on December 19, 2022

The Texas A&M Master and LL.M. programs (e.g. international tax, transfer pricing, wealth management, or risk management) are accepting applications from financial professionals and from lawyers. Over 850 enrolled, the enrollment for a course’s section is kept to between 20 and a maximum of 30 so that each student receives meaningful feedback throughout the course from the full-time academic faculty and renowned professional case study leaders, and each other via teamwork and peer review. https://law.tamu.edu/distance-education

Prof. William H. Byrnes         Robert Bloink, J.D., LL.M.

The Inflation Reduction Act was signed by President Biden in August.  This week, we remind our subscribers of some of the most valuable energy-related tax credits that will be available to individual taxpayers once the new law becomes fully effective, plus a summary of the extended loss limitation provisions that apply under the Act.  Also, a reminder that the deadline for Medicare creditable coverage notices is right around the corner.

Inflation Reduction Act Extends and Expands Two Valuable Energy Tax Credits for Individuals.  Much of the Inflation Reduction Act doesn’t directly impact tax liability for individual taxpayers.  However, the law does contain two valuable energy tax credits for individuals.  The law renamed the nonbusiness energy property tax credit the “Energy Efficient Home Improvement Credit” under IRC Section 25C. The law extends the credit through 2032.  While the old rules for claiming the credit continue to apply in 2022, beginning with the 2023 tax year, the credit will be expanded to equal to 30% of the costs of eligible home improvements made during the year. It will also be expanded to cover the cost of additional energy-efficient property. Similarly, the residential energy efficient property credit has been renamed the Residential Clean Energy Credit. That credit was set to expire in 2024 and was extended through 2034. Under the Inflation Reduction Act, the credit amount increases to 30% from 2022 to 2032. It then decreases to 26% for 2033 and 22% for 2034. The credit is set to expire after 2034.  For more information on claiming these tax credits, visit Tax Facts Online.  Read More

Inflation Reduction Act Extends Limitation on Excess Business Losses.  Under the 2017 tax reform legislation, excess business losses of a non-corporate taxpayer are not allowed for the taxable year. These losses are carried forward and treated as part of the taxpayer’s net operating loss carryforward in subsequent tax years. NOL carryovers generally are allowed for a tax year up to the lesser of the carryover amount or 80 percent of taxable income determined without regard to the deduction for NOLs.  An “excess business loss” is the excess of aggregate deductions of the taxpayer attributable to trades or businesses of the taxpayer (determined without regard to the limitation of the provision), over the sum of aggregate gross income or gain of the taxpayer plus a threshold amount. The annual threshold amount is $250,000 (or twice the otherwise applicable threshold amount for married taxpayers filing a joint return). The Inflation Reduction Act of 2022 extends the limitation on excess business losses through 2028.  For more information on the excess loss limitation provisions, visit Tax Facts Online. Read More

Don’t Forget: The  Notice Deadline for Creditable Coverage Each Year. Employers who provide prescription drug coverage are required to notify all Medicare-eligible employees about creditable or non-creditable status by October 15.  With the onslaught of COBRA subsidy notices in recent months, this deadline was lost in the shuffle by many employers who now need to seek IRS compliance remediation .  Individuals who do not enroll in Medicare Part D when first available, but who enroll later, pay higher premiums permanently unless they have creditable prescription drug coverage.  These increased premiums apply if the individual goes at least 63 consecutive days without creditable coverage.  Employers are required to provide notice each year to help employees understand whether employer-provided coverage is creditable.  This year, notices were due by October 15, 2022.  Determining whether coverage is creditable involves examining whether the employer’s coverage is at least as good (measured actuarially) as standard Medicare Part D prescription drug coverage.  Employers can provide the notice electronically and there is no need to conduct a separate mailing, although the employer should take steps to ensure the notice is easy to find.  Creditable coverage notice must also be given if creditable status changes or upon the individual’s request.  For more information on the creditable coverage requirement, visit Tax Facts Online.  Read More

Look in your Tax Facts Online app for our continuing analysis of 2022 and 2023 legislative and regulatory updates, weekly intelligence, and the impact on planning for a client’s wealth preservation and growth.

Texas A&M, operating budget of $9.6 billion (FY2022) and capital budget of $1.9 billion, is #1 for U.S. public universities, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space! The law school, ranked in the 1st tier of law schools and is ranked in the top 10 for the employment of its graduating law students among U.S. law schools.

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