Federal Funding Bills Extend Tax CreditsJanuary 2nd, 2020 by Kyra Thompson
On December 20, 2019, President Donald Trump signed several bipartisan bills extending government funding through fiscal year (FY) 2020. The move has drawn praise from officials for several industry associations reporting that the legislation extends tax credits for energy-efficient windows.
“The government funding bills I just signed into law contain big victories for my Administration and the American people,” said President Trump in a press statement released the same day.
According to officials for the National Lumber and Building Material Dealers Association (NLBMDA), several included “tax extenders” reinstate incentives that expired in 2017. Key incentives for the building materials industry include:
- Section 25C Tax Credit: Providing a credit of up to $500 for consumers installing qualified energy-efficiency improvements, with a lifetime cap of $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.
Legislation also repeals several tax-related provisions in the Affordable Care Act (ACA) including a 40% excise “Cadillac tax” on high-dollar employer-sponsored health insurance plans, which President Trump said, “ultimately placed severe financial burdens on employees.”
Also repealed is a health insurance tax (HIT) including a fee imposed annually on fully-insured health care plans offered by many small and medium-sized businesses.
Several building industry associations expressed their support of the President’s decision.
“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 and 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 National Association of Home Builders (NAHB) also wrote about the tax extenders on the association’s blog describing it as a “victory” for the housing community and saying that the legislation rolls out provisions sought by NAHB officials.