NOVEMBER 24, 2015. House and Senate negotiators are working on a tax extenders package that
would make the research credit permanent and delay the Affordable Care Act’s “Cadillac” tax on high-cost
healthcare plans for two years, according to a tentative outline obtained by Tax Analysts November 24.
Negotiators are not close to a deal but are looking seriously at the framework discussed by Senate Finance
Committee member Charles E. Schumer, D-N.Y., and House Speaker Paul Ryan, R-Wis., when the latter served
asWays and Means chair, tax lobbyists and House staffers said. The two lawmakers were unable to agree on the
level of funding for highway programs, and negotiations stalled. (Prior coverage: Tax Notes, Oct. 12, 2015, p. 226.)
According to tax lobbyists and House staffers, the tentative deal now under consideration is being developed by
all congressional leaders and the White House. The extenders are likely to be attached to the omnibus budget
legislation expected to pass Congress by December 11. (Prior coverage: Tax Notes, Nov. 23, 2015, p. 1011.)
The plan under consideration would also delay the medical device tax in exchange for additional funding forACA
risk corridors, which is a program that allows federal payments to insurers to offset high losses in the initial years
of the ACA.
The other big components are permanent extension of the research credit, which passed the House earlier this
year, and permanent (code;section 179)section 179 expensing and deductions for state and local sales taxes.
The plan reportedly includes miscellaneous provisions affecting charitable giving and S corporations. Also on the
table are provisions regarding subpart F active financing.
The deal includes a permanent extension of the expanded earned income and child tax credits, but Republicans
are pushing to make changes to combat fraud in those refundable credit programs.
“I’ve been told that they are working on some program integrity provisions for the refundable credits that could
have the support of both Republicans and congressional” Democrats, one of the tax lobbyists said.
Ryan and Schumer had been working on an extenders deal in September with program integrity provisions that
could be attached to the highway funding and international tax reform deal they were negotiating. While those talks
stalled, both lawmakers have said they hoped to continue working on an international tax reform bill.
“All this could fall apart,” the tax lobbyist said. “We could end up with a one- or two-year retroactive deal.”
Author: Cooper, Stephen K.; Basu, Kaustuv Tax Analysts