1999 Tax Guide: Expired Provisions

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Chapter 1
Expired Provisions
The Current Scene

Several tax provisions that were initiated or reinstated at the end of 1998 have now expired or apply only to tax year 1999. There is significant pressure on Congress to extend these provisions to future years, but Congress will have to find additional revenue offsets or decide to use the budget surplus to fund the extensions.

Alternative Minimum Tax Relief. A provision that allows nonrefundable personal tax credits (for example, the child tax credit) to offset the individual’s regular tax in full is available only for taxable years beginning in 1998 (as opposed to only by the amount that the regular tax exceeds the tentative minimum tax, as under prior law). Generally, the nonrefundable personal tax credits are allowed only to the extent that the individual’s regular income tax liability exceeds the individual’s tentative minimum tax.

In addition, the provision of present law that reduced the additional child credit (for families with three or more qualifying children) by the amount of an individual’s alternative minimum tax is not applicable only for taxable years beginning in 1998.

The following three tax provisions all expired June 30, 1999:
- The Research and Experimentation Tax Credit
- The Work Opportunity Tax Credit
- Welfare-to-Work Credit
Exceptions under Subpart F Rules for Certain Active Financing Income. The temporary exceptions from subpart F income that is derived in the active conduct of a banking, financing, or similar business or in the conduct of an insurance business are applicable only for taxable years beginning in 1999.

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