Several tax-related provisions Congress approved to help those impacted by the coronavirus pandemic are scheduled to expire at the end of the year.

The Coronavirus Aid, Relief, and Economic Security provisions could be extended by Congress or addressed in a new round of pandemic relief legislation.

But for now, these provisions are set to expire Dec. 31:

  • The Employee Retention Tax Credit, a 50% refundable payroll tax credit available to certain employers on wages paid up to $10,000 during the crisis
  • Extension of unemployment benefits for an additional 13 weeks, including self-employed workers, independent contractors, and those with limited work history
  • Deferral of employee-side payroll taxes
  • Delay of employer-side Social Security payroll tax payments, with 50% owed Dec. 31, 2021 and 50% owed Dec. 31, 2022
  • Suspension of alcohol excise taxes on alcohol used to produce hand sanitizer
  • Suspension of aviation excise taxes
  • Loosening the net interest deduction limitation from 30% of earnings before interest, tax, depreciation, and amortization to 50%
  • Waiver of the 10% early distribution penalty for hardship withdrawals from retirement accounts and waiver of required minimum distribution rules for certain retirement plans
  • Expansion of the charitable deduction, including a $300 partial above-the-line charitable contribution for filers taking the standard deduction and higher limit on charitable contributions for itemizers

Additional Tax Changes

In addition, these changes to federal tax law are expected in the next one to five years:

  • Beginning in tax year 2020, business taxpayers who pay or receive nonemployee compensation must complete new Form 1099-NEC to report any payment of $600 or more
  • Businesses will be required to deduct research and experimentation costs over five years rather than immediately beginning Jan. 1, 2022
  • The deduction for business net interest expense will be limited to 30% of EBIT rather than 30% of EBITDA beginning Jan. 1, 2022
  • Full expensing for short-life business expenses will begin phasing out Jan. 1, 2023
  • The pass-through deduction (section 199A) will expire at the end of 2025
  • The reduction of the alternative minimum tax will expire at the end of 2025
  • The reduction of the real estate tax will expire at the end of 2025
  • Three international related provisions—the global intangible low-taxed income tax, the foreign-derived intangible income tax, and the base erosion and anti-abuse tax—will become more restrictive at the end of 2025
  • The reduction of individual income tax rates will expire at the end of 2025
  • The increase in the standard deduction, elimination of the personal exemption, and doubling of the child tax credit will expire at the end of 2025
  • Limits on state and local tax deduction and the mortgage interest deduction will expire at the end of 2025