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1 1 (October 23, 2020)

handle is hein.crs/govdcjc0001 and id is 1 raw text is: SConr essional Research Servik Tax Policy on the Horizon: Potential Tax Policy Issues in the 117th Congress October 23, 2020 What tax policy issues will be at the forefront early in the 117th Congress depends, in part, on what actions are or are not taken late in the 116th Congress. Policy issues being discussed towards the end of 2020 that could carry forward into 2021 include additional tax policy measures addressing the COVID-19 pandemic and the extension of tax provisions expiring at the end of 2020. This Insight highlights some of the tax policy issues that may arise in the first session of the 117th Congress (in 2021) and perhaps beyond. Tax Policy Relief Related to COVID-19 The 116th Congress has already passed legislation providing tax relief in response to the ongoing COVID- 19 pandemic and related economic recession. Congress is currently debating whether additional federal financial support is needed, and what form that support should take. Much of the existing support has expired or is scheduled to expire at the end of 2020. For example, the 2020 recovery rebates were direct payments to individuals nominally structured as credits against 2020 income taxes (the credits were issued to many taxpayers in 2020, using 2019 or 2018 income tax information). Businesses experiencing net operating losses (NOLs) in 2020 can carry those losses back for up to five years. Employers and self- employed individuals were allowed to defer a portion of the employer share of certain payroll taxes due in 2020. Those deferred payroll taxes will be due in 2021 and 2022. Debates early in the 117th Congress may evaluate potential further extensions of COVID-19 tax relief measures, or new fiscal policy or economic support legislation. Expired and Expiring Tax Provisions Tax policy debates in the 117t Congress might also address the further extension of expired or expiring tax provisions. The Joint Committee on Taxation (JCT) lists 33 temporary tax provisions scheduled to expire at the end of 2020. If these are not extended before December 31, 2020, reinstatement or a retroactive extension may be considered during 2021 or later. Another six temporary tax provisions are scheduled to expire at the end of 2021. Several other temporary tax provisions expire at the end of 2022 or 2023. Expiring tax provisions span a range of policy areas, affecting individuals, businesses, and the energy sector. In addition to the calendar year-end expirations, the Highway Trust Fund excise taxes and Congressional Research Service https://crsreports.congress. gov IN11522 CRS INS GHT Prepared for Members and Commi:tees oCf Conres--- ------------------------------------- -------------------------------------------------------

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