Extensions for Rules that Expired in 2016

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As part of a budget deal passed on February 9, 2018, Congress has retroactively extended the tax provisions that expired at the end of 2016. The extensions are only for 2017 (with one exception noted below). The extensions apply to:

  • The exclusion from gross income for discharge of qualified principal residence indebtedness
  • The itemized deduction for mortgage insurance premiums
  • The above-the-line deduction for tuition and fees
  • The nonbusiness energy credit for home insulation, storm windows and other energy-saving improvements
  • The credits for residential fuel cells, wind turbines and geothermal heat pumps, which are extended through 2021, and subject to the same phase down as for solar panels and solar water heating property (for 2020 and 2021)
  • The credit for two-wheel electric drive vehicles

The measure also requires the IRS to create a new tax form to be used starting with 2019 returns (filed in 2020) for taxpayers age 65 and older by the end of the year. Form 1040SR will be an option for seniors with income from Social Security, distributions from retirement plans and IRAs, interest and dividends, and capital gains and losses. There will be no limit on the amount of income that can be reported on this form.