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2019 Tax Changes

Secure Act Tax Changes

  1. In 2020, the traditional IRA RMD begins at age 72 instead of age 70 ½. Those who turned 70 ½ before Dec 31, 2019 still have the previous RMD requirement.
  2. The IRA contribution age limit was removed for 202 taxpayers earning income or the non-working spouse. They may contribute to IRAs after age 70 ½ At age 72, there is an RMD, but if still working there also is an allowed contribution and catch up contribution
  3. Long-time part-time employees are 401K Eligible. The qualifying work requirement is now 10 hours per week or 500 hours per year. This change takes effect in 2021.
  4.  Students (graduate or post-doc only) with tuition and scholarship income are able to count that compensation as retirement eligible income..
  5. Inherited IRAs must be fully distributed with in 10 years of the taxpayer’s death. Exceptions exist for Special Needs Trusts, spouse and children under the age of 18.
  6. Distribution from 529 Plans may be used to pay off student loans and interest. This change takes effect in 2019 with a $10,000 lifetime limit.
  7.  QCD, Qualified Charitable Distributions, can now carry a disqualifying basis. Deductible IRA Contributions after age 70 ½ reduce the QCD allowance in the current year and possible future years

Reinstated Tax Provisions

  1. The medical base remains at 7.5% instead of increasing to 10%.
  2. Deduction for mortgage insurance premiums as qualified residence interest (subject to income limits).
  3. Deduction for tuition and related expenses.
  4. Nonbusiness Energy Property Credit (i.e., insulation, storm doors/windows, etc.).
  5. Exclusion from income of the debt cancellation that is acquisition indebtedness on the taxpayer’s principal residence of up to $2,000,000.
  6. Depreciable life of certain race horses as 3-year property.
  7. Depreciable life for motorsports entertainment complexes of 7-year property.
  8. Accelerated Depreciation for business property on Indian Reservations.
  9. Energy Efficient Homes Credit (aka Builders Credit).
  10. Qualified Fuel Cell Motor Vehicles Credit.
  11. Alternative Fuel Refueling Property Credit.
  12. 2-Wheeled Plug-in Electric Vehicle Credit.
  13. Black Lung Disability Trust Fund Excise Tax.
  14. Indian Employment Credit.
  15. Railroad Track Maintenance Credit.
  16. Mine Rescue Team Training Credit.
  17. Expensing under §181(g) for certain productions.
  18. Various incentives for Empowerment Zone Activities.
  19. Economic Development Credit for American Samoa.
  20. Biodiesel and Renewable Diesel Credit.
  21. Second Generation Biofuel Producer Credit.
  22. Electricity Produced from Certain Renewable Resource Credit.
  23. Indian Coal Facilities Credit.
  24. Special Allowance for Second Generation Biofuel Plant Property.
  25. Energy Efficient Commercial Buildings Deduction.
  26. Special Rule for Sales or Dispositions to Implement Ferc or State Electric Restructuring Policy for Qualified Electric Utilities.
  27. Extension and Clarification of Excise Tax Credits relating to alternative fuels.
  28. Oil Spill Liability Trust Fund Rate.

Business Credits

  1. New Markets Credit.
  2. Employer Credit for Paid Family & Medical Leave.
  3. Work Opportunity Credit.
  4. Certain Provisions Related to Beer, Wine, and Distilled Spirits.
  5. Look-thru Rule for Related Controlled Foreign Corporations.
  6. Credit for health insurance costs of Eligible Individuals.

These provisions now run through December 31, 2020.

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