Protecting Americans from Tax Hikes Act of 2015

Yes, that is the actual title of the tax extenders that President Obama signed mid-December of 2015.

In summary, here are some key extenders for individuals and businesses:

  • State and Local Sales Tax Deduction - The election to claim an itemized deduction for state and local general sales taxes, in lieu of deducting state and local income taxes, expired after December 31, 2014. The Act makes the election permanent.
  • American Opportunity Tax Credit - The Act makes permanent the American Opportunity Tax Credit (AOTC), an enhanced version of the Hope education credit. The AOTC has been available at an increased level of $2,500, with adjusted gross income (AGI) phase-out amounts of $80,000 (single) and $160,000 (married filing jointly). The AOTC had been scheduled to expire after 2017.
  • Child Tax Credit - The Act makes permanent the reduced earned income threshold amount of an unindexed $3,000. This provision had been scheduled to expire after 2017.
  • Teachers’ Classroom Expense Deduction - The Act permanently extends the above-the-line deduction for elementary and secondary–school teachers’ classroom expenses. It also modifies the deduction by indexing the $250 ceiling amount to inflation beginning in 2016. Additionally, the Act includes “professional development expenses” within the scope of the deduction.
  • Qualified Tuition/Related-Expenses Deduction - The Act extends through 2016 the above-the-line deduction for qualified tuition and fees for post-secondary education.
  • Mortgage Debt Exclusion - The Act excludes from income cancellation of mortgage debt on a principal residence of up to $2 million ($1 million for a married taxpayer filing a separate return) through 2016. The Act also modifies the exclusion to apply to qualified principal residence indebtedness discharged in 2017 if discharge is made under a binding written agreement entered into in 2016.
  • Mortgage Insurance Premium Deduction - This measure treats mortgage insurance premiums as deductible interest that is qualified residence interest subject to AGI phase-out. The Act extends this special treatment through 2016.
  • Code Sec. 179 Expensing - Pre-Act, the dollar limit for Code Sec. 179 expensing for 2015 had reverted to $25,000 with an investment limit of $200,000. The Act permanently sets the Code Sec. 179 expensing limit at $500,000 with a $2 mil-lion overall investment limit before phase out (both amounts indexed for inflation beginning in 2016).
  • Solar Incentives - The FY 2016 omnibus extends the solar in-vestment tax credit and the credit for quali-fied residential solar property but subjects the credits to phase-down. Under the omnibus, both credits will not be available after 2021.
  • Nonbusiness energy property credit - The act extends through 2016 the credit for purchases of nonbusiness energy property.

For a detailed and extensive list of the 2015 tax extenders, check out the Joint Committee on Taxation's technical summary here.