The Biden administration’s first 100 days were largely focused on addressing the COVID-19 crisis—accelerating vaccine distribution and stabilizing public health. With that initial phase now behind him, President Biden has begun advancing broader policy priorities that span the economy, environment, technology, healthcare, and taxation.

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Priority: Putting the Pandemic Behind Us

The American Rescue Plan Act (ARPA), passed in March 2021, provided $1.9 trillion in stimulus focused on:

• Direct stimulus checks

• Expanded unemployment and paid leave

• Emergency small business relief

• Support for state/local governments

• Vaccine distribution and testing

What to Watch:
While the pandemic will eventually recede, its economic and societal impacts will linger. Forward-looking businesses are adapting to post-pandemic realities—rethinking how they manage employees, serve customers, and ensure resilience amid future disruptions.

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Priority: Doing Well by Doing Good

The administration has embraced Environmental, Social, and Governance (ESG) priorities, starting with climate action:

• Rejoining the Paris Agreement

• Proposing a $2T Clean Energy Revolution

• Eliminating fossil fuel emissions from power by 2035

• Promoting EV infrastructure, zero-emission transit, and eco-building standards

• Calling for a 50–52% emissions reduction by 2030 (vs. 2005 levels)

Regulatory Focus:
The SEC’s Climate & ESG Task Force is enhancing disclosure requirements for environmental, diversity, and governance practices.

What to Watch:
Public and investor expectations around ESG are growing. Forward-thinking companies are embedding sustainability, equity, and purpose into core operations—and those that do so effectively may see higher profitability and lower risk.

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Priority: Innovation in the Spotlight

The pandemic underscored America’s reliance on technology. The Biden administration acknowledges this while signaling increased oversight of Big Tech—particularly around:

• Antitrust enforcement

• Cybersecurity protections

• Data privacy regulation

What to Watch:
CFOs are doubling down on digital transformation, but balancing tech investment with regulatory compliance will be critical.
📊 BDO Survey Highlights:

• 55% plan to increase R&D spending

• 39% accelerated digital investments due to the pandemic

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Priority: Defining “Bidencare”

While sweeping healthcare reform is unlikely, the Biden administration is working to strengthen the Affordable Care Act (ACA):

• Expanding enrollment and subsidies

• Capping healthcare premiums at 8.5% of income

• Exploring a public option

What to Watch:
Employers should expect rising interest in expanded care access (especially mental health and telehealth) as employee well-being becomes a business imperative.

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Priority: Building Back Better

The American Jobs Plan outlines the administration’s infrastructure vision, including:

• Roads, bridges, airports, transit

• Electric vehicle (EV) charging networks

• Broadband expansion and clean water

• Modernizing schools and housing

• Investments in R&D and workforce training

What to Watch:
Infrastructure spending could provide a major boost to productivity and supply chain stability. Projects with environmental and equity components will likely take priority.

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Priority: Tax Increases on the Table

To fund investments, the Biden administration has proposed several tax changes:

• Raising the corporate tax rate from 21% to 28%

• Increasing individual tax rates on those earning over $400,000

• Enhancing GILTI and other international tax rules

• Reinstating elements of the corporate AMT

• Introducing surcharges and limiting deductions

What to Watch:
Per BDO’s 2021 Tax Outlook Survey:

• 92% of tax execs expect a corporate rate hike

• Priorities include income tax, international tax, and payroll adjustments

The midterms may dictate the legislative window for major tax reform. Until then, targeted changes are possible via reconciliation.

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Priority: Regulating Wall Street

Appointing Gary Gensler (SEC) and Rohit Chopra (CFPB), the administration signaled a stricter approach to financial regulation. Expect:

• Increased enforcement

• Enhanced consumer protections

• Closer scrutiny of disclosure and compliance standards

What to Watch:
Robust compliance and data governance will become key differentiators for businesses, not just regulatory requirements.

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Final Thoughts: The Role of Business in a Divided Climate

With midterm elections approaching and a polarized Congress, President Biden may face challenges pushing through all elements of his agenda. Businesses should prepare for rapid shifts, especially in ESG, innovation, infrastructure, and taxation.

Takeaway:
In moments of political gridlock, corporate leadership will play a pivotal role in driving progress. Businesses that align operations with policy shifts—and lead with purpose—can shape a more resilient and equitable economy.

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As you may know, the IRS extended the 2020 income tax filing deadline to May 17, 2021. However, this extension does not apply to all tax forms. One notable exception is Form 709, the Federal Gift Tax Return, which must still follow its original due date guidelines.

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When Is Form 709 Required?

You must file Form 709 if, in 2020, you:

• Gave more than $15,000 to any one individual (including gifts in trust)

• Made gifts under $15,000 to certain types of trusts

• Gave hard-to-value assets, such as:

  • Artwork

  • Closely held business interests

These are personal gifts—not charitable contributions, which are reported on your Form 1040.

Examples of recipients include:

• Family (e.g., children, nieces, nephews)

• Friends

• Business associates

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Important Filing Note for 2020

Although the deadline for filing Form 1040 was extended, the deadline to extend Form 709 remained April 15, 2021.

To extend your time to file Form 709, you must have filed either:

• Form 4868 – Application for Extension of Time to File Your Individual Income Tax Return

• Form 8892 – Application for Extension of Time To File Form 709

If neither form was filed by April 15, you may be considered late, even if you plan to file your Form 1040 by the extended May 17 deadline.

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What You Should Do Now

If you believe you may have a gift tax filing requirement, it is critical to act immediately. Late filing can result in penalties and interest, and missing an extension deadline further complicates compliance.

📞 Contact our office today at 561-995-0064 if you have questions or need assistance determining your filing obligations.

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We’re here to help and ensure you stay in compliance with evolving tax requirements.

Stay safe and well,

Lerro & Chandross PLLC

The Premium Tax Credit (PTC) is a refundable tax credit that helps individuals and families afford health insurance purchased through a Marketplace under the Affordable Care Act (ACA). The American Rescue Plan Act of 2021 (ARPA) introduced several temporary but impactful enhancements to this credit.

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Expanded Eligibility for Taxpayers Over 400% of the Federal Poverty Level (FPL)

Before ARPA:
Taxpayers with household income above 400% of the FPL were not eligible for the PTC.

Under ARPA (2021–2022):
The income cap is eliminated. Taxpayers above 400% of the FPL can now qualify for the PTC.

Example:
A single 45-year-old with $58,000 in income (450% of FPL) would not have qualified under previous rules. Under ARPA, they may now receive a PTC of approximately $1,250.

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New Percentage Tables Increase PTC Amounts

PTC is calculated based on the cost of a benchmark health plan minus the taxpayer’s required premium contribution, which is tied to household income.

ARPA Changes:

• Reduces the maximum premium contribution to 8.5% of income (from 9.83%) for 2021 and 2022.

• Expands support for those at lower income levels.

Example:
A 21-year-old at 150% of FPL may see their PTC increase from $3,500 to $4,300 under ARPA.

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Special Rule for Unemployment Compensation Recipients in 2021

If you received (or were approved to receive) unemployment compensation for at least one week in 2021, the following applies:

• You automatically qualify as an eligible PTC recipient (unless you’re eligible for affordable employer coverage).

• Your household income above 133% of FPL is disregarded when calculating your PTC.

This effectively caps your required contribution and boosts your PTC, regardless of actual income above 133% of FPL.

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No Repayment of Excess Advance PTC for 2020

Under normal rules, if advance PTC payments exceed the actual calculated credit, the overage must be repaid as additional income tax (subject to a cap).

ARPA Exception (2020 only):
If advance PTC exceeded your actual credit in 2020, you do not have to repay the excess.

Important Note:
If you’ve already filed your 2020 return and repaid excess credit, the IRS advises not to amend your return yet. Guidance on refund procedures is forthcoming.

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Contact Us

Questions about your eligibility or tax return?
📞 Call us at 561-995-0064 to speak with a tax advisor.

On March 10, 2021, the House of Representatives passed the American Rescue Plan Act (ARPA), H.R. 1319. Below is a summary of key tax and benefit provisions included in the final legislation.

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Unemployment Benefits

• The first $10,200 in 2020 unemployment benefits is tax-free for taxpayers with adjusted gross income (AGI) under $150,000.

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Recovery Rebates (Third Stimulus Payments)

• Individuals receive a $1,400 recovery rebate credit, or $2,800 for joint filers, plus $1,400 per dependent, including college students and qualifying relatives.

• Income phaseout begins at:

  • $75,000 for single filers (fully phased out at $80,000)

  • $150,000 for joint filers (fully phased out at $160,000)

  • $112,500 for heads of household (fully phased out at $120,000)

• Eligibility determined using 2019 AGI unless the 2020 return has been filed.

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COBRA Continuation Coverage

• Provides premium assistance through September 30, 2021.

• Eligible individuals can receive 100% subsidy for COBRA premiums.

• Employers claim a refundable tax credit against Medicare payroll tax (Sec. 3111(b)).

• No income tax inclusion for COBRA premium assistance.

• Penalties apply for failure to notify cessation of eligibility (Sec. 6720C).

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Expanded Child Tax Credit (2021 Only)

• Increases credit to:

  • $3,600 per child under 6

  • $3,000 per child ages 6–17

• Fully refundable and available to 17-year-olds.

• Phaseout thresholds:

  • $150,000 (MFJ)

  • $112,500 (HOH)

  • $75,000 (others)

• Advance monthly payments to begin July through December 2021.

• Excess payments may need to be reconciled on 2021 return, with safe harbor protections for lower-income taxpayers.

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Earned Income Tax Credit (EITC) Enhancements

• Expands eligibility for childless individuals:

  • Lowers age to 19 (or 18 for certain youth); no upper age limit.

• Increases phaseout amounts and disqualifying investment income threshold to $10,000.

• Taxpayers may use 2019 income instead of 2021 income for a higher credit.

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Child and Dependent Care Credit (2021 Only)

• Fully refundable for 2021.

• Credit covers 50% of eligible expenses up to:

  • $4,000 for one qualifying individual

  • $8,000 for two or more

• Credit begins to phase out at $125,000 household income.

• Employer-provided dependent care exclusion increased to $10,500.

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Paid Sick and Family Leave Credits

• Extended through September 30, 2021.

• Employers may claim credits under Sections 3131–3133.

• Paid leave includes:

  • COVID-19 illness, quarantine, testing, or vaccination

• Maximum credit for family leave increased to $12,000.

• Self-employed individuals may use up to 60 days.

• Leave reset for additional 10 days after March 31, 2021.

• Credits extended to 501(c)(1) government organizations.

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Employee Retention Credit

• Extended through December 31, 2021.

• Credit allowed against Medicare tax (Sec. 3111(b)).

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Premium Tax Credit (Health Insurance Marketplace)

• Enhanced for 2021 and 2022.

• No repayment of excess advance premium credits for 2020.

• Anyone approved for unemployment compensation in 2021 is treated as an applicable taxpayer for PTC eligibility.

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Student Loan Discharge Exclusion

• Loan forgiveness between January 1, 2021, and December 31, 2025, is excluded from gross income.

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Other Provisions

• Section 162(m): Expands $1 million deduction cap for executive compensation to include the five highest-paid employees (effective after 2026).

• Section 461(l): Extends the limitation on excess business losses for noncorporate taxpayers through 2027.

• Repeal of Section 864(f): Eliminates worldwide interest allocation election.

• Targeted EIDL Grants and SBA Restaurant Grants:

  • Excluded from gross income

  • No deduction denial, basis adjustment, or attribute reduction

• Multiemployer Pension Plans: Temporary relief for certain designation statuses and funding changes.

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For assistance in understanding how these provisions impact your tax situation or business, contact our office to schedule a consultation.

The U.S. Internal Revenue Service (IRS) has launched a new initiative, Operation Hidden Treasure, to increase enforcement efforts related to unreported cryptocurrency income.
This marks a significant step in the agency’s evolving approach to crypto tax compliance.

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A Dedicated Crypto Enforcement Effort

Operation Hidden Treasure is a joint effort between:

• The IRS Office of Fraud Enforcement

• The IRS Criminal Investigation Division

The program will train agents to use blockchain analysis to identify tax evasion patterns. It’s part of a broader strategy by the IRS to address emerging financial threats.

At a Federal Bar Association tax conference, Damon Rowe, Director of the Office of Fraud Enforcement, confirmed that cryptocurrency fraud is a top priority for the agency.

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How the IRS Will Uncover Crypto Tax Evasion

According to Carolyn Schenck, National Fraud Counsel for the IRS:

• The IRS is partnering with blockchain analytics firms to identify “signatures” or red flags of fraudulent activity.

• IRS employees are training alongside Europol to enhance investigation techniques.

Agents will look for:

• Structuring transactions just below reporting thresholds (e.g., multiple $9,999 transfers)

• Use of shell corporations to disguise ownership

• Patterns of moving assets on and off blockchain networks

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Taxable Events & Reporting Guidance

While guidance around cryptocurrency tax reporting has sometimes been unclear, the IRS has reaffirmed that:

• Buying virtual currency with U.S. dollars is not a taxable event and generally does not need to be reported.

• Cashing out, trading, or spending cryptocurrency is taxable and must be reported.

Operation Hidden Treasure will focus on identifying such unreported taxable events and linking them back to individual taxpayers.

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What This Means for Taxpayers

The message from the IRS is clear: Crypto transactions are not invisible, and non-compliance can lead to significant consequences.

If you have crypto holdings or have engaged in transactions involving digital assets:

• Review your transaction history carefully

• Understand what constitutes a taxable event

• Ensure accurate reporting on your tax return

Questions about crypto tax compliance?
📞 Contact our office at 561-995-0064 for expert guidance on reporting, planning, and minimizing audit risks.

The recently enacted Consolidated Appropriations Act offers valuable extensions and expansions of tax breaks for small-business owners. Below is a summary of the most relevant provisions to consider as you plan for the years ahead:

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✅ Business Expense Deductions & Credits

• 100% Deduction for Business Meals
  Business meals (dine-in or takeout) provided by restaurants are fully deductible in 2021 and 2022.

• Work Opportunity Tax Credit (WOTC)
  Extended through 2025 for employers hiring individuals from 10 targeted groups.

• New Markets Tax Credit
  Qualifying investments may claim a 39% credit through 2025.

• Empowerment Zone Incentives
  Extended through 2025, though:

  • Enhanced first-year depreciation

  • Capital gains tax deferral
    are both eliminated beginning in 2021.

• Section 127 Student Loan Assistance
  Employers may pay up to $5,250 toward employee student loans (principal + interest) tax-free through 2025.

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🏘️ Real Estate, Depreciation & Property Provisions

• 30-Year Depreciation (Elective)
  For residential rental property placed in service before 2018 (previously depreciated over 40 years), businesses may now use a 30-year straight-line schedule if they opted out of TCJA interest limitations.

• Motorsports Complex Depreciation
  Seven-year recovery period extended through 2025.

• Film, TV & Theater Production Write-Offs
  Qualified productions starting before 2025 are eligible for:

  • $15M first-year write-off limit

  • $20M limit in designated disadvantaged zones

• Racehorse Depreciation
  Racehorses two years old or younger placed in service in 2021 qualify for 3-year depreciation.

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🌱 Energy Efficiency & Clean Tech Incentives

• Commercial Building Energy Deduction
  The per-square-foot deduction is now permanent:

  • $1.80/sq. ft. for energy-efficient improvements

  • $0.60/sq. ft. for partial qualifications

• Residential Energy-Efficient Home Credit
  Homebuilders may claim:

  • $1,000 or $2,000 per qualifying home through 2021

• EV Refueling Property Credit
  Businesses installing non-hydrogen alternative-fuel stations (e.g., electric vehicle chargers) can claim up to 30% of the installation cost through 2021.

• Hydrogen-Powered Vehicle Credit
  Businesses may claim up to:

  • $4,000 to $40,000 for qualifying hydrogen-fueled vehicles through 2021.

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📉 Disaster Relief, Loans & Tax Treatment

• SBA EIDL Advances & Loan Assistance
  These funds are:

  • Non-taxable

  • Do not reduce tax attributes (like NOLs or basis)

• Farmer-Specific NOL Carryback Adjustment
  Farmers may elect a 2-year NOL carryback (instead of 5 years) retroactively, as if it had been in the original CARES Act.

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📞 Need Help Navigating These Opportunities?

We can help you determine which tax breaks apply to your business and how to take full advantage of them.

Contact our office at 561-995-0064 to schedule a consultation.

If you have not received a PPP loan before, First Draw PPP Loans may be available to you.

Two things to know about the Paycheck Protection Program (PPP) first draw enacted on December 27, 2020:

• The first draw is for those who missed getting in on the original PPP, which expired on August 8, 2020.
• Don’t think of a PPP draw as a loan. It’s not a loan. It’s a cash infusion. You have to repay a loan. You don’t have to repay the PPP funds.

Who qualifies for first-draw PPP money today? You, most likely—if you file a business tax return and have not yet received any PPP monies.

But don’t wait. The money is going to run out fast, and once it’s gone, so is the PPP. And the new PPP ends March 31, even if the money is not gone by then.

You qualify for the PPP if any of the following are true:

• You file your taxes on Schedule C of your tax return. Businesses that file on Schedule C include independent contractors (often called 1099 folks), single-member LLCs, proprietorships, and statutory employees such as life insurance salespeople.
• You file your taxes on Schedule F (ranchers and farmers).
• You are a general partner in a partnership, but the partnership asks for and receives the money based on your and the other partners’ combined self-employment incomes, as adjusted.
• You operate as an S corporation.
• You operate as a C corporation.
• You are the only worker in the business—and if you have employees in the business, you qualify on both your ownership worker status and your employees’ W-2 status.

 

 

With the victories of Jon Ossoff and Raphael Warnock in the Georgia Senate runoff elections, Democrats now control the Presidency, the House of Representatives, and the Senate. Although the Georgia results had not yet been officially certified at the time of writing, this political shift provides the Biden administration with a narrow governing majority.

During his campaign, President Biden outlined a framework for tax reform focused on increasing taxes for corporations and high-income individuals. While broad in scope, many specifics remain uncertain. Areas of potential reform include:

• Corporate and individual income tax rates

• Capital gains tax treatment

• Estate and gift tax exemption levels

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How Tax Changes Could Take Shape

1. Part of a COVID-19 Relief Package

Tax changes may first appear in a broader COVID-19 relief bill. These could include:

• Temporary tax cuts or credits

• Expanded retirement contributions

• Measures targeting small businesses

Such provisions would likely be effective immediately and aimed at supporting recovery from the pandemic.

2. Repeal and Replace the TCJA

Biden could attempt a full rollback and replacement of the 2017 Tax Cuts and Jobs Act (TCJA). However, given the narrow Senate majority, this would be difficult unless Democrats eliminate or amend the legislative filibuster. This option is unlikely in the near term as the administration’s focus is on pandemic response.

3. Modify the TCJA

Rather than repeal the TCJA, Biden may pursue targeted changes. These could include:

• Raising the corporate tax rate from 21% to 28%

• Adjusting individual tax brackets

• Modifying specific provisions such as deductions and credits

This incremental approach is more politically viable and may be prioritized once the public health crisis is under control.

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Factors Influencing Tax Policy Direction

Legislative Filibuster

Without changes to Senate rules, most major tax legislation would require 60 votes. Budget reconciliation—which requires only a simple majority—may be used, but changes passed through this method typically expire after 10 years.

Key Treasury Appointments

Treasury appointees will shape the administration’s tax strategy. Critical positions include:

• Assistant Secretary for Tax Policy

• Deputy Assistant Secretary for Tax Policy

• Tax Legislative Counsel

Until these roles are filled, major legislative activity may be delayed.

Bipartisanship Outlook

Biden has expressed a desire to govern in a bipartisan manner. A compromise—such as a corporate tax rate increase to 28% instead of restoring the 35% pre-TCJA rate—may appeal to both parties.

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Business Implications

While tax reform is not the administration’s immediate priority, some short-term tax changes could be included in pandemic relief legislation. More significant reforms, especially tax increases, are unlikely before 2022.

Businesses should monitor:

• COVID-related relief bills for immediate tax implications

• Treasury appointments and Senate dynamics for timing and scope of future reforms

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Current vs. Proposed Tax Policy Overview

On December 21, 2020, Congress passed H.R. 133, the Consolidated Appropriations Act (CAA), 2021, which includes:

• Division N – Additional Coronavirus Response and Relief (ACRR)

• Division EE – Taxpayer Certainty and Disaster Tax Relief Act of 2020 (TCDTR)

The bill passed with strong bipartisan support and is expected to be signed into law. Below is a summary of the most relevant provisions for individuals and small businesses.

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Individual Economic Relief

• $600 Stimulus Payments
  Individuals earning up to $75,000 (or $150,000 for married couples) will receive $600, plus $600 for each child dependent.

• $300 Weekly Unemployment Boost
  Additional federal unemployment benefits are reinstated through March 14, 2021, with eligibility extended through April 5, 2021, and maximum weeks increased to 50 weeks.

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Business Meals Deduction

To support the restaurant industry, businesses can now deduct 100% of restaurant meals (dine-in and takeout) for expenses incurred from January 1, 2021 through December 31, 2022.

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Paycheck Protection Program (PPP) Updates

• Second Round of Funding
  Eligible businesses may apply for a second PPP loan of up to $2 million, provided they:

  • Employ 300 or fewer employees per location

  • Have used or will use their first PPP loan

  • Experienced at least a 25% drop in gross receipts in any 2020 quarter compared to the same quarter in 2019

  Special Rule for Hospitality and Food Services:
  These businesses may borrow up to 3.5x average monthly payroll costs, still capped at $2 million.

• PPP Expense Deductibility Clarified
  PPP loan forgiveness is not taxable, and expenses paid with PPP funds are fully deductible, allowing for full tax benefits.

• EIDL Advance Adjustment Repealed
  PPP borrowers are no longer required to reduce their forgiveness amount by the EIDL advance they received.

• Simplified Forgiveness for Loans Under $150,000
  Borrowers can submit a simplified certification of eligibility and retain records for possible SBA review.

• Expanded Eligible Expenses
  In addition to payroll, rent, utilities, and mortgage interest, businesses can now use PPP funds for:

  • Personal protective equipment (PPE) and facility modifications

  • Supplier costs essential to operations

  • Software and cloud-based services

  • Accounting services

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Grants for Shuttered Venue Operators

$15 billion is allocated for grants to eligible live venue operators, theaters, museums, promoters, and talent agents.

• Must show 25% revenue reduction

• Tiered distribution prioritizes applicants with the most significant revenue losses (90%+ or 70%+ revenue decline compared to 2019)

At least $2 billion is reserved for venues with fewer than 50 full-time employees.

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Paid Leave Tax Credit Extensions

• Employer Paid Sick and Family Leave Credits
  Extended through March 31, 2021. Employers are not required to offer leave, but if they do, credits are available.

• Self-Employed Leave Credits
  May continue using 2019 earnings instead of 2020 to calculate credit amounts.

• Payroll Tax Treatment
  Qualified wages under this leave program are excluded from Social Security tax.

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Deferred Payroll Tax Repayment Extension

Employers that postponed the 6.2% employee Social Security tax in 2020 now have until December 31, 2021 to repay it, with penalties and interest delayed until January 1, 2022.

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Employee Retention Credit (ERC) Expansion

Changes apply to wages paid through June 30, 2021:

• Credit rate increased from 50% to 70% of qualified wages

• Per employee wage limit increased to $10,000 per quarter

• Applies to employers with 500 or fewer employees

• New employers that did not exist in 2019 may also qualify

Employers can now claim both PPP and ERC, subject to restrictions.

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Unemployment Insurance Enhancements

• Extended Pandemic Unemployment Assistance (PUA) through March 14, 2021

• $300/week federal supplement reinstated

• State reporting required to track individuals refusing to return to suitable work

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If you have questions about how these provisions affect your business or individual situation, contact our office at 561-995-0064 for assistance.

With the 2020 general election results mostly finalized, attention turns to what federal tax changes could be implemented under the Biden administration. While Democrats gained control of the White House and House of Representatives, control of the Senate hinged on Georgia’s runoff elections in early January. Even with a narrow Democratic majority, passing significant tax reform remains uncertain due to political dynamics and the ongoing economic impact of COVID-19.

Below is a summary of the most prominent proposals in the Biden tax plan, including both individual and corporate provisions.

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Individual Tax Proposals

Higher Maximum Individual Tax Rate

• Top rate would increase from 37% to 39.6%.

• Applies to those earning over $400,000 (specific income definition unclear).

Limit on Tax Savings from Itemized Deductions

• Limits tax benefit of deductions to 28% for higher earners.

• Reinstates phase-out of itemized deductions for high-income taxpayers.

• Likely supports repeal of the $10,000 SALT deduction cap.

Higher Tax Rate on Long-Term Capital Gains

• For income above $1 million, long-term capital gains and qualified dividends would be taxed at 39.6% (plus 3.8% NIIT).

• Maximum effective rate: 43.4% (up from 23.8%).

Increased Social Security Tax for High-Income Individuals

• Restarts 12.4% Social Security tax for income above $400,000.

• Creates a “donut hole” structure between the current cap and $400,000.

Elimination of Step-Up in Basis for Inherited Assets

• Would remove step-up in basis at death.

• Gains would be taxed on inherited assets as if sold at death.

Elimination of Certain Real Estate Tax Breaks

• Repeals the $25,000 rental loss allowance for active participants.

• Ends 1031 like-kind exchanges for real property.

• Eliminates QBI deduction and accelerated depreciation for certain real estate activities.

Phaseout of QBI Deduction

• The 20% deduction under Section 199A would phase out for incomes over $400,000.

Enhanced Child and Dependent Care Tax Credits

• Child tax credit increased to $3,000 ($3,600 for children under 6), fully refundable.

• Dependent care credit increased to $8,000 for one child, $16,000 for two or more; also fully refundable.

Health Insurance Credits

• Ensures no household spends more than 8.5% of income on premiums.

• Refundable credits would reduce cost for middle-income families.

First-Time Homebuyer Credit

• Up to $15,000 refundable credit at time of purchase.

Equalized Retirement Plan Contribution Benefits

• Would revise rules to provide greater benefit for lower-income earners, reducing current skew toward high earners.

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Corporate Tax Proposals

Higher Corporate Tax Rate

• Increase from 21% to 28%.

Minimum Tax on Book Income

• 15% minimum tax on book income for corporations earning $100 million or more.

International Tax Changes

• GILTI inclusion taxed at 21% on a country-by-country basis.

• Eliminates QBAI exemption.

• Adds penalties for offshoring jobs and new credits for domestic production (“Made in America” credit).

Financial Risk Fee

• Imposed on financial institutions with more than $50 billion in assets.

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Green Energy & Environmental Proposals

• Reinstates or expands tax incentives for energy-efficient commercial and residential investments.

• Reintroduces and expands electric vehicle credits.

• Eliminates deductions for fossil fuel development costs.

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Conclusion

While these proposals outline the Biden administration’s tax agenda, implementation depends on several factors:

• Senate control and use of budget reconciliation.

• Political appetite for tax increases in a post-COVID economy.

• Prioritization of public health, economic recovery, and bipartisanship.

Businesses and individuals should remain vigilant, as even incremental tax changes could significantly impact planning strategies. We will continue monitoring legislative developments and provide updates as more information becomes available.

Questions about how these proposals could affect you or your business?
Contact our office to schedule a consultation.