Tax extenders are enacted.

• Author: Nevius, Alistair M.

The Consolidated Appropriations Act, 2016, P.L. 113-114, which was enacted Dec. 18, 2015, extends an extensive list of expired tax provisions-some permanently, some for five years, and many for two years, through 2016.

Among the permanent extensions are the Sec. 41 research credit (with modifications) and the Sec. 179 deduction (also with modifications). Bonus first-year depreciation was not made permanent but was extended through 2019. Many other tax items are included, such as a delay of the so-called Cadillac health care tax under Sec. 49801 for two years and a moratorium on the 2.3% medical device excise tax under Sec. 4191, which would not apply to sales during 2016 and 2017.

In a break with congressional tradition, the act extended many provisions permanently, giving taxpayers who take advantage of those tax breaks more certainty in the future.

Child tax credit: The threshold g amount for determining whether a taxpayer is eligible for the refundable (or additional) Sec. 24 child tax credit is permanently set at $3,000 (not indexed for inflation). That amount has been the threshold since 2009, but it was scheduled to expire at the end of 2017. Some retroactive claims for the child tax credit are precluded by preventing taxpayers from amending a return (or filing an original return) for any prior year in which the taxpayer or the qualifying child did not have an individual taxpayer identification number (ITIN) to claim the credit. Individuals are barred from claiming the credit for 10 years if they fraudulently claimed the credit and for two years if they are found to have claimed the credit with reckless or intentional disregard of the rules. The IRS is given math error authority to disallow improper credits without a formal audit. The act also imposes new due-diligence requirements on practitioners who prepare returns claiming the credit.

American opportunity tax credit: The Sec. 25A American opportunity tax credit is made permanent and modified. An individual is barred from retroactively claiming the credit by amending a return (or filing an original return) for any prior year in which the individual or a student for whom the credit is claimed did not have an ITIN. It also bars individuals from claiming the credit for 10 years if they fraudulently claim the credit and for two years if they are found to have claimed the credit with reckless or intentional disregard of the rules. As with the child tax credit, the IRS is given math error authority to disallow improper credits without a formal audit. Taxpayers claiming the credit must report the employer identification number of the educational institution to which the taxpayer makes payments that qualify for the credit. The act imposes new due-diligence requirements on practitioners who prepare returns claiming the credit.

Earned income tax credit: The enhanced provisions of the Sec. 32 earned income tax credit (EITC) are made permanent, including an increased amount for families with three or more children and an increased phaseout range for married taxpayers fifing jointly. After 2015, the phaseout range is indexed for inflation. The...