Optima Law Group Blog

Protecting Americans From Tax Hikes Act of 2015: What it Means for Your Business?

You may have been busy celebrating the holidays while President Obama signed “The Protecting Americans from Tax Hikes Act of 2015 (PATH),” bill into law on December 18, 2015. What does this mean for your business? As a new tax season is upon us, it is time to take note of the changes.

For the past few Decembers, Congress has passed “temporary” tax provisions but this new bill finally makes them permanent. This should give businesses confidence in 2016 as these important tax incentives has been extended through 2019, or permanently in some cases.

Here are a few of the bill’s notable Business Tax extenders:

  • Tax credit for research expenditures, which allows a qualified small business (i.e., a corporation or partnership with gross receipts less than $5 million in a taxable year) to elect a credit against payroll tax liability, up to $250,000, in lieu of taking a research tax credit.
  • Work opportunity tax credit. Allows a credit for the hiring of a qualified long-term unemployment recipient (unemployed for not less than 27 consecutive weeks).
  • Exclusion of 100% of gain on certain small business stock
  • Equalization of the tax exclusion for employer-paid mass transit and parking benefits. Expands such exclusion to include bike-sharing programs. 
  • Increases the national limitation amount for the new markets tax credit through 2016. Extends through 2021 the period for carryover of unused limitation amounts.