The Consolidated Appropriations Act of 2016, or as it is more commonly known, the “Omnibus,” was passed and signed into law on December 18. Most of the tax incentive provisions are included in one portion of the bill: “The Protecting Americans From Tax Hikes Act of 2015” (The PATH Act).
Of particular interest to our membership are sections 179 and 168 which were passed. Both are items which the National Affairs Task Force has been focused on for a number of years.
Section 179 was permanently extended with a $ 500,000 expense write off limit for capital equipment acquisitions and a $2 million phase out threshold. These limits will be indexed for inflation going forward. Section 168 was extended until 2019 with bonus depreciation of 50% for assets acquired in 2015 – 2017, 40% bonus depreciation for assets acquired in 2018, and only 30% bonus depreciation for assets acquired in 2019.
Both of these provisions should help to encourage some additional capital equipment investment over the next few years while interest rates are low and the economy continues to recover.
Also passed was a permanent extension of section 41, known as the R&D tax credit (starting in 2016 for companies under $50 million in gross receipts the credit can be applied to offset the alternative minimum tax), as well as several credits related to S-corporations.
On another note, if you have interest in joining the National Affairs Task Force for 2016 please contact Volker Schmitz, Chairman, at Volker.firstname.lastname@example.org or 516-768-5079. We will be focused on continuing to promote to our elected officials support for Career and Technical Education to help close some of our skills gaps.