WASHINGTON–During the final session of the 115th Congress CUNA said it plans to pursue expired tax cuts, also known as “tax extenders.”
When Congress adjourns it is expected to meet for no more than a month. When it returns in January it will be to a House of Representatives now under Democratic control.
The so-called tax extenders are temporary tax provisions, most often tax cuts, that have scheduled expiration dates, but are often extended by Congress. Congress may consider a tax extender package in November and December, CUNA said.
Among the specific tax extenders for which CUNA said it will be advocating is
Earlier this year, Congress passed the Bipartisan Budget Act of 2018, which included two tax extender provisions of importance to credit unions. Both provisions expired at the end of 2017, and CUNA is working to have them included in a new tax extender package.
One provision would not treat the discharge of mortgage debt forgiveness as income. This provision was extended retroactively through the end of 2017, so individuals with forgiven mortgage debt wouldn’t have to pay federal taxes on the forgiven debt from 2017.
This provision also eliminates the requirement for most financial institutions (including credit unions) to file an IRS Form 1099-C on a mortgage default involving an individual's primary residence.
If this provision had not been extended, credit unions would have been required to file IRS Form 1099-Cs on certain serviced mortgages, adding to the already high compliance burden on credit unions.
The second tax provision that needs an extension is one that retroactively made deductible mortgage insurance premiums paid in 2017 as homeowners filed 2017 returns.