国会研究服务部-临时个人税收规定（英文）-2021.4-16页_1mb

Summary of Temporary Individual Tax Provisions ("Tax Extenders")

Core Content

The Taxpayer Certainty and Disaster Tax Relief Act of 2020, enacted as Division EE of the Consolidated Appropriations Act, 2021 (P.L. 116-260), addressed the expiration of several temporary individual tax provisions. These provisions, often referred to as "tax extenders," were either extended, made permanent, or repealed. The law also modified related permanent provisions to enhance their effectiveness.

Main Provisions and Their Status

Extended through the End of 2021

• Mortgage Insurance Premium Deductibility

  • Allows itemizers to deduct qualifying mortgage insurance premiums if their AGI is below certain thresholds.
  • Originally available for 2007, extended through 2021.
  • The TCJA (2017) reduced the number of itemizers due to higher standard deductions and SALT caps.

• Health Coverage Tax Credit (HCTC)

  • Provides a 72.5% refundable tax credit for eligible individuals' health insurance premiums.
  • Originally authorized by the Trade Act of 2002, extended through 2021.
  • Not available for months starting after 2020.

• Charitable Deduction for Nonitemizers

  • Allows nonitemizers to deduct up to $300 in cash donations.
  • Extended through 2021 by P.L. 116-260.
  • Likely to have a limited effect on overall charitable giving due to its low cap.

• Increased Limits to Charitable Contributions

  • Raised the limit for cash contributions to public charities from 50% to 60% of AGI through 2025.
  • Extended through 2021.
  • The increase in the limit is expected to reduce the number of itemizers who benefit from charitable deductions.

• Flexible Spending Accounts (FSAs) Rollover

  • Allows employees to roll over unused FSA funds from 2020 to 2021 and from 2021 to 2022.
  • Expanded coverage of dependent care expenses to children under 14.
  • Allows health FSA funds to be available to employees who were terminated in 2020 or 2021.
  • Enables midyear contribution changes for plans ending in 2021.

Extended through the End of 2025

• Exclusion for Employer Payments of Student Loans

  • Excludes up to $5,250 of employer-provided student loan payments from gross income.
  • Originally part of the CARES Act (2020), extended through 2025.
  • Applies to payments made before January 1, 2026.

• Tax Exclusion for Canceled Mortgage Debt

  • Excludes canceled mortgage debt for primary residences from taxable income.
  • Originally effective for debt discharged before 2010, extended through 2025.
  • Supporters argue it helps distressed households, while opponents raise concerns about encouraging irresponsible debt behavior.

Made Permanent

• Medical Expense Deduction AGI Floor of 7.5%

  • Allows itemizers to deduct medical expenses exceeding 7.5% of AGI.
  • Originally set at 7.5% before the Affordable Care Act (ACA) increased it to 10% in 2013.
  • The 7.5% floor was made permanent for individuals aged 65 or older, and for all taxpayers in 2021.

• Benefits for Volunteer Firefighters and Emergency Medical Responders

  • Excludes certain income from state and local tax rebates and reimbursements for these individuals.
  • Made permanent by P.L. 116-260.

Repealed and Replaced

• Above-the-Line Deduction for Qualified Tuition and Related Expenses
  • Repealed, with the Lifetime Learning Credit (LLC) income phaseout level increased.
  • This change was part of a broader effort to modify tax provisions related to education.

Key Information

• Total Estimated Cost of Provisions (FY2021-FY2030): The estimated budgetary impact of the provisions is outlined in Table 1, with total costs ranging from $0.1 billion to $5.9 billion.
• Rationale for Extensions and Permanent Changes: Provisions were extended or made permanent to support economic recovery, especially in the wake of the Great Recession and the COVID-19 pandemic.
• Impact on Taxpayers: Some provisions, like the mortgage insurance premium deduction, are less likely to be used due to changes in the tax code, such as the standard deduction and SALT cap.
• Charitable Deductions: While some limits were increased, the overall effect on charitable giving is expected to be minimal due to the small size of the nonitemizer deduction and the reduced number of itemizers.
• Debt Forgiveness and Taxation: The tax exclusion for canceled mortgage debt was extended to support homeowners, while the exclusion for student loan payments was extended to assist individuals during the pandemic.

Conclusion

The Taxpayer Certainty and Disaster Tax Relief Act of 2020 extended or made permanent several key temporary tax provisions, addressing their expiration and providing continued support for homeowners, individuals with health insurance costs, and charitable contributions. These changes were aimed at promoting economic stability and recovery, particularly in light of the impacts of the CARES Act and the pandemic. The law also included a repeal and modification of an education-related deduction, reflecting a shift in policy priorities.