Daily Tax Update - December 18, 2015: Omnibus and Tax Extenders Legislation Passes Congress and is Signed Into Law

Omnibus and Tax Extenders Legislation Passes Congress and is Signed Into Law:  The “taxibus” legislation saw a lot of movement today.  This morning, the House passed the omnibus portion of the legislation on a 316-113 vote (the tax-extenders portion was passed by the House yesterday).  The Senate passed the combined bill (H.R. 2029) shortly thereafter by a 65-33 vote, and President Obama signed it into law late this afternoon.  For prior DTU analysis of the bill, click here.

Miscellaneous Guidance Released: Notice 2016-1 provides the optional 2016 standard mileage rates for taxpayers to use in computing the deductible costs of operating an automobile for business, charitable, medical, or moving expense purposes.  The notice also provides the amount taxpayers must use in calculating reductions to basis for depreciation taken under the business standard mileage rate, and the maximum standard automobile cost that may be used in computing the allowance under a fixed and variable rate plan.

Revenue Ruling 2016-1 provides various prescribed rates for January 2016 for federal income tax purposes including the applicable federal interest rates, the adjusted applicable federal interest rates, the adjusted federal long-term rate, and the adjusted federal long-term tax-exempt rate.

DTU IN DEPTH:

Tax Extender Legislation Includes Permanent Extension and Modification of the Research and Development Credit:  Section 121 of the extender section of the legislation (known separately as the Protecting Americans from Tax Hikes Act of 2015) reinstates the research and development (R&D) credit under section 41 retroactively for amounts paid or incurred during calendar year 2015 and makes the credit permanent going forward.  The legislation also permits certain small businesses to use the R&D credits determined for taxable years beginning after December 31, 2015 against alternative minimum tax (AMT) and employer payroll taxes.  For in-depth coverage of these provisions, click here.