2022 Year-End Tax Legislation Guidance

Congress has come together and agreed on an $1.7 trillion omnibus appropriations bill that was signed by The President last Thursday. Unfortunately, The Bill did not contain tax provisions that many were hoping for, such as the expanded Child Tax Credit, relief from the Section 174 Research and Development Amortization requirement, modifications to Section 163(j) Interest Limitation or tax extenders.

Below is a list of what the Bill includes.

• Limitations on syndicated conservation easements
• Health provisions on telehealth, Medicare physician payment cuts, and Medicaid
• Aid to Ukraine and an overhaul of the Electoral Count Act
• SECURE 2.0 Act retirement package

SECURE 2.0 Act

The SECURE 2.0 Act has brought comprehensive changes to retirement plans (see our recent advisor). Some of the key changes of this update include:

• Increasing the age for when required minimum distributions (RMDs) start
• Increasing the amount of the catch-up contribution limits
• Requiring automatic enrolment for new plans
• Increased start-up plan credits for small employers
• Expanding tax-free charitable rollovers from IRAs
• Modification of the Saver’s Credit to a Saver’s match program

Additional Year-End Updates

The IRS has released a series of Frequently Asked Questions regarding the energy efficient home improvements and residential clean energy property credits from the Inflation Reduction Act.

The IRS has also released IRS Notice 2023-10, delaying the $600 reporting threshold for third-party payment platforms Form 1099-K. The 2021 threshold of $20,000 will apply for the 2022 tax year. The one exception to this is if back-up withholding was performed, then the Form 1099-K must be filed with the IRS and the payee to report the receipts and the withholding.