2018Issue1_Alabama_v2.indd

“the bill does not repeal the individual mandate of the Affordable care act, despite some reports along these lines.”

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The Work Opportunity Tax Credit and New Markets Tax Credit are preserved. The deduction for expenses related to employee meals is repealed but employees can continue to exclude the benefit from income. However, the tax act also expands the 50 percent limit to de minimus fringe benefits to onsite eating facilities until Dec. 31, 2025. Afterwards, employer costs for providing food and beverages to employees through an onsite facility are not deductible.

health insurance to $0, making the mandate toothless. The repeal of the tax penalty does not begin until 2019 – so individuals are technically able to be fined in 2018. This likely will not have a significant impact on business aspects of the health care law, however, left unresolved it could make health insurance markets more unstable, which will have ripple effects for the whole system. It eliminates carry-backs and limits the use of Net-operating losses (NOLs) to offset up to 80 percent of a company’s taxable income. It creates a temporary tax credit of 12.5- 25 percent for businesses that provide employees with paid family or medical leave depending on how much of the employees’ wages are paid above 50 percent. Consult your accountants. The deduction for state and local lobbying expenses is repealed. The use of like-kind exchanges is basically limited to real estate transactions. The deduction for domestic manufacturing operations (Sec. 199) is repealed. Some in the industry may currently use this provision to help write-off expenses associated with central kitchens, etc. It removes the ability to deduct the cost of legal settlements if a violation of the law takes place. Also prevents write-off of sexual harassment claims if an NDA is attached.

repealed and remains in place at 40 percent. However, the exemption for estates from the tax was doubled to $11 million for individuals and $22 million for couples. The gift tax exemption is also doubled. However, both provisions expire at the end of 2025. Full expensing is allowed for qualified property placed in service between Sept. 27, 2017, and Jan. 1, 2023. The proposal phases-down in 2023 and beyond. Both new and used property can be included in the calculation. Sec. 179 expensing (aka “small business” expensing) is also made more generous with the maximum increased to $1 million and the phase-out threshold set to $2.5 million. This is permanent, but you may want to consider full expensing in the years it is allowed. The deduction for interest expenses is limited to 30 percent of a taxpayer’s adjustable taxable income. The formula for how adjusted taxable income is calculated changes in 2022. It uses a more generous EBITDA formula for the first four years and than a less generous EBIT in later years. An important rulemaking will determine what will be included in the formula! The bill does not repeal the individual mandate of the Affordable Care Act, despite some reports along these lines. It does reduce the tax penalty for individuals failing to purchase • 2023 – 80% • 2024 – 60% • 2025 – 40% • 2026 – 20%

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ALABAMA GROCER |