Package Includes Tax Extenders and Repeal of Health Insurance Tax
[Washington, D.C.] Last Friday, President Trump signed two bills passed by Congress which fund the federal government through the remainder of fiscal year (FY) 2020. The National Lumber and Building Material Dealers Association (NLBMDA) released the following statement.
“NLBMDA applauds Congress and President Trump for working together to pass legislation that fully funds the federal government through the end of fiscal year 2020”, said NLBMDA President & CEO Jonathan Paine. We were especially pleased that the package addressed two critical NLBMDA priorities including the extension of key small business tax incentives and the permanent repeal of the health insurance tax. This legislation represents a major grassroots victory for our members who have worked tirelessly to contact their Members of Congress on these important initiatives.”
The appropriations package extends a number of tax incentives, known as “tax extenders”, through the end of calendar year 2020. These extenders apply retroactively to 2018 and 2019. Key incentives for the lumber and building material industry include:
- Section 25C Tax Credit: Provides a credit worth up to $500 for consumers to install qualified energy-efficiency improvements. The lifetime cap on these improvements is $500. Windows are eligible for a tax credit up to $200 with a lifetime cap of $200.
- Section 45L Tax Credit: Provides a credit for energy-efficient new homes. The credit is equal to $2,000 per home for homes built by contractors and $1,000 per manufactured home. To be eligible, an energy-efficient new home is required to have annual heating and cooling consumption that was at least 50% (30% in the case of manufactured homes) below a comparable unit.
- Section 179D Energy-Efficient Commercial Buildings Deduction: The 179D provision allows for a tax deduction of $1.80 per square foot to owners of new or existing commercial buildings who install qualified materials that reduce the building’s total energy and power cost by 50% or more, including to the building envelope. These reductions must exceed energy efficiency requirements under ASHRAE 2007.
- Mortgage Forgiveness: Provides mortgage forgiveness tax relief by eliminating any taxes home owners might face due to renegotiating the terms of a home loan on a principal residence.
- Mortgage Insurance Deduction: Allows home owners to deduct the premiums paid for private and public mortgage insurance, subject to an income cap starting at $100,000.
In October, NLBMDA sent a letter to Congress urging them to extend these incentives.
Health Insurance Tax and Cadillac Tax Repeal
The funding package permanently repeals the health insurance tax (HIT). This is a fee imposed annually on fully insured health care plans that are offered by many small and medium-sized businesses. The legislation also repealed the so-called “Cadillac Tax” which is a 40% excise levy on high-cost health plans.
About the National Lumber and Building Material Dealers Association (NLBMDA)
The National Lumber and Building Material Dealers Association (NLBMDA) is the recognized voice and resource of the Lumber and Building Material industry to federal legislators and regulatory agencies in Washington DC. NLBMDA provides its members the resources and education to comply with federal laws, codes and regulations. NLBMDA identifies challenges and growth opportunities to the industry and collaborates with its Federateds to develop solutions that require national implementation. Visit us at www.dealer.org to learn more.