The House Ways and Means Committee is scheduled to mark up on Thursday, June 20, the "Taxpayer Certainty and Disaster Tax Relief Act of 2019," to extend through 2020 tax provisions that expired at the end of 2017 and 2018, and that will expire at the end of 2019, plus disaster relief tax provisions. The Committee will also consider separate bills to: expand the Earned Income Tax Credit and Child Tax Credit, and repeal the expansion of unrelated business income tax (UBIT) to the transportation fringe benefits of non-profits; and to clarify that all tax provisions apply to legally married same-sex couples the same as other married couples.

The revenue offset to fully cover the $33.19 billion 10-year cost of the extenders provisions would accelerate the sunset of the Tax Cuts and Jobs Act (TCJA) estate tax regime — the TCJA roughly doubled the estate tax exemption, which is an inflation-adjusted $11.4 million per-person for 2019 — to the end of 2022 instead of the end of 2025.

The Senate version of the tax extenders bill, the "Tax Extender and Disaster Relief Act Of 2019" (S. 617) introduced in February by Finance Committee Chairman Chuck Grassley (R-IA) and Ranking Member Ron Wyden (D-OR), would retroactively extend, through 2019, 26 tax provisions that have been expired since the end of 2017 and another three that expired at the end of 2018 (the reduction in the deduction floor for medical expenses, the oil spill liability trust fund rate, and the black lung liability trust fund excise tax).

The House bill is similar, with the notable differences being:

• omission of the Senate bill provisions extending the classification of certain race horses as three-year property and the election to expense advanced mine safety equipment
• the inclusion of the estate tax revenue offset
• the inclusion of provisions that expire at the end of 2019

Provisions expiring at the end of 2019 that would be extended, through 2020, under the House extenders bill (but not the Senate version) are:

• the controlled foreign corporation (CFC) look-through rule
• the Work Opportunity Tax Credit
• the New Markets Tax Credit, providing a $5 billion allocation for 2020 and extending for one year, through 2025, the carryover period for unused credits
• the beginning of construction deadline for wind facilities for the renewable electricity production credit and the election to claim the energy credit in lieu of the electricity production credit (for wind facilities the construction of which begins in calendar year 2020, the credit is reduced by 60%)
• the employer tax credit for paid family and medical leave
• certain provisions related to beer, wine, and distilled spirits excise taxes and record-keeping requirements
• the credit for health insurance costs of eligible individuals, a refundable credit (commonly referred to as the health coverage tax credit or "HCTC") equal to 72.5% of the premiums paid by certain individuals for coverage of the individual and qualifying family members under qualified health insurance

The bill would also provide tax relief for individuals and businesses in Presidentially-declared disaster areas occurring between January 1, 2018, and 30 days following date of enactment of the legislation. It would also change the private foundation excise tax from a two-tiered tax of 1% and 2% to a simplified tax of 1.39%.

Release of the bill caps lengthy negotiations within the Committee majority, primarily over whether and how to pay for the extenders package, especially given that House Democrats have adopted "pay-go" rules requiring revenue-losing bills coming to the House floor to be offset. While extensions of expired or expiring provisions have traditionally not been offset, it appears including offsets may be necessary to get a bill out of Ways and Means and through the House. Chairman Neal has described the package as a negotiating position for the tax extenders. A corporate tax rate increase said to be contemplated for other provisions to be marked up by the Committee is not reflected in any of the materials that have been released.

Other bills

The Economic Mobility Act of 2019 introduced by Chairman Neal, also for markup on June 20, would, for two years:

• make the Child Tax Credit (CTC) fully refundable for families who currently make too little to receive the entire credit, allowing all families to receive the full credit of $2,000 per child
• expand the Earned Income Tax Credit (EITC) for workers without children
• increase funding for the Child Care Development Fund (CCDF), expanding the child and dependent care tax credit (CDCTC) and dependent care flexible spending accounts (FSA)
• increase the amount of the exclusion for employer-provided dependent care assistance from $5,000 to $10,500

The bill would also repeal the requirement that the unrelated business income tax (UBIT) of tax-exempt organizations be increased by expenses related to qualified transportation fringe benefits (the so-called "church parking tax"). This bill does not include revenue offsets.

The "Promoting Respect for Individuals' Dignity and Equality (PRIDE) Act of 2019" would allow lawfully married same-sex couples to file claims for credits and refunds related to a change in marital status back to their year of marriage, and amend the tax code so that provisions that apply to married couples use gender-neutral language.

JCT descriptions and revenue estimates of the bills are attached. Text of the bills is available here.

———————————————

———————————————
ATTACHMENTS

Dignity and Equality Act of 2019

Estimated Revenue Effects of H.R. 3299

Economic Mobility Act of 2019

Estimated Revenue Effects of H.R. 3300

Tax Payer and Disaster Tax Relief Act of 2019

Estimated Revenue Effects of H.R. 3301