IRS building sign

The Internal Revenue Service is now processing all tax returns claiming benefits related to the Bipartisan Budget Act, which was enacted on Feb. 9 and renewed for Tax Year 2017 a wide range of individual and business tax benefits that expired at the end of 2016.

Many individual taxpayers were able to file returns in late February that included claims for exclusion from gross income of discharge of qualified principal residence indebtedness; mortgage insurance premiums treated as qualified residence interest; and the deduction for qualified tuition and related expenses.

Other extenders now available for processing include: the credit for nonbusiness energy property; modification of the credit for residential energy property; the credit for new qualified fuel-cell motor vehicles; the credit for two-wheeled plug-in electric vehicles; and the waiver of limitations with respect to excluding from gross income amounts received by wrongfully incarcerated individuals.

The extenders issue has complicated returns for some preparers. “I have quite a backlog of returns that are complete but I’m holding them until we have updated IRS forms and tax software updates to accommodate the extenders,” New York Enrolled Agent Phyllis Jo Kubey said earlier in the season. “For planning purposes, the question remains, ‘Will these provisions be extended again or will 2017 be the final year for them?’”

“I’ve had clients that would have benefited from them, but we can't remember [what the extenders] are at this point. We’ll go back and look after the season ends,” added Helen O’Planick, an EA at HELJAN Associates in Manchester, Pa.

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Jeff Stimpson

Jeff Stimpson

Jeff Stimpson is a veteran freelance journalist who previously served as editor of The Practical Accountant.