February 7, 2018

Expired Tax Extenders Have New Life?

Last fall, during the tax reform process, the ‘Tax Extenders’ (provisions that expired at the end of 2016, including the Empowerment Zone Tax Credit EZTC and the Indian Employment Tax Credit IETC) were not part of the discussion.  At that time, Chairman Brady of the House Ways & Means committee, was not in favor of extending them or even bringing them up for debate.  The Senate also didn’t raise them during their tax reform debate, however certain promises were made on the Senate side, and just before Congress recessed for the holidays Chairman Hatch introduced a bill in the Finance Committee that would extend them through 2018.

Since that time, not much activity has occurred with the Tax Extenders and Chairman Brady had continued to show his opposition to reviving them.  However, within the past week, it seems that the Tax Extenders are beginning to see new life on Capitol Hill as Congress continues to work on their spending bill.

Yesterday Chairman Brady was quoted as saying “I think short-term, temporary policies are rarely the best, but nonetheless, each of those provisions has an industry that’s tied strongly to it, along with those members who advocate for it, and so that’s why I think having a good, thorough review of how those fit in a post-tax reform world is the right way to address those [provisions]”.

This afternoon it now appears that a possible compromise between the House and Senate may involve renewing the Tax Extenders retroactively for 2017 and then holding hearings on them in the near future to debate their continuation in 2018 and beyond.

The significance of this not only affects those with locations in areas to capture the tax credits associated with the EZTC and IETC, but also affects the WOTC program as the Empowerment Zones are part of the Designated Community Resident target group.  Those applications, that we’ve continued to submit during 2017 and 2018, would be eligible to become certified once the Tax Extenders are renewed.

All of this is still very fluid and is subject to change at the hands of Congress, but the Tax Extenders do appear to be off life support and may have a good chance of being renewed this year.

We’ll keep you posted as significant developments occur.  Please feel free to reach out to me with any questions.

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