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Fallback Extender Bill Still Includes Enhancements

Ways and Means Chairman Kevin Brady has introduced a two-year extender bill to serve as a fallback position in case a larger deal proves elusive. The buzz is certainly making it sound like two years will be the best Congress can do.

However, even this two-year proposal is not just a simple extension of the dates. It includes some significant enhancements to business tax credits.

1. A new category of qualified employee would be added to the Work Opportunity Tax credit. Individuals who have been unemployed at least 27 consecutive weeks and received federal unemployment benefits for at least part of that time would become eligible for the credit.

2. The research credit would be improved in multiple ways. The alternative simplified credit (ASC) would be increased from 14 to 20 percent, and eligible small businesses would be able to use the credit to offset AMT and/or payroll tax liability. Qualified small businesses are businesses with $50 million or less in gross receipts.

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