House Passes One-Year Tax Extenders Bill

A measure renewing a number of tax breaks for this year was passed by the House last week and is expected to clear the Senate without amendments this week. It’s good news for 2014 tax filers, but expect another round of debate on extenders in the new Congress.

The House easily passed a bill last week to retroactively renew dozens of expired tax breaks for this year only, easing the upcoming tax-filing season but ensuring that legislators will be back at the negotiating table on tax extenders next year.

The House passed the bill (H.R. 5771  (opens in a new tab)) by a 378-46 vote. House Ways and Means Committee Chairman Dave Camp (R-MI) said the one-year deal was the only option left to Congress after the White House issued a veto threat  (opens in a new tab) in November on a deal that would have made certain extenders permanent.

“Obviously I was looking for a much bigger package,” Camp told Bloomberg BNA Daily Tax Report  (opens in a new tab) [subscription required]. “That clearly isn’t going to happen, so this is what we’re forced to do and this is what will be signed by the president.”

Senate Democrats wanted a two-year tax extenders package, but with the House action last week and the dwindling number of days in the lame-duck session, most appear resigned to accepting the House bill. The Senate is expected to vote on the House bill without amendments this week.

Speaking to the Business Roundtable, President Obama said  (opens in a new tab) last week that he would be open to making some extenders permanent, including the business tax credit for research and development, as long as some credits that benefit working families—such as the child tax credit and college tuition tax credit—are also included in the package.

According to The New York Times  (opens in a new tab), Obama told the Roundtable that tax reform is at the top of the White House’s list of economic priorities for next year. He also said that an overhaul of the tax code faces significant challenges, including the fact that Republicans are pushing to overhaul both corporate and individual taxes while the White House wants to focus on corporate taxes.

“There is definitely a deal to be done,” Obama said. “If we start with the corporate side, it’s a more discrete problem, fewer variables, fewer moving parts.”

Rep. Dave Camp (R-MI) noted that politics limited the length of the tax extenders to a single year. (Facebook photo)