President Trump Signs Tax Reform Bill: Today President Trump signed H.R. 1 into law. Among other things, the act lowers the corporate tax rate to 21%, establishes a territorial tax system for multinational companies, and provides a deduction for income earned through pass-through businesses. The act also eliminates the Affordable Care Act individual mandate, eliminates or reduces a number of itemized deductions and exemptions, and increases the standard deduction. The act will cost $1.46 trillion, according to an estimate from the Congressional Budget Office and the Joint Committee on Taxation. With a few exceptions, the act will largely take effect in 2018. Several provisions of the act refer to the date of the enactment of the “Tax Cuts and Jobs Act”; because of reconciliation rules, that title does not appear in the enrolled bill.
President Trump also signed into law a short-term spending bill that suspends the PAYGO budget rule that would have been triggered by the additional deficits caused by tax reform. PAYGO is intended to prevent budget deficits by requiring decreases in revenue to be matched with cuts in mandatory spending.
CBO Releases Analysis of Distributional Effects of Changes in Taxes and Spending Under Tax Reform Bill: The Congressional Budget Office (CBO) has released an analysis of the distributional effects of changes in taxes and spending under H.R. 1. Based on that analysis, the overall combined effect of the change in net federal revenues and spending is to decrease deficits (primarily stemming from reductions in spending) allocated to lower-income tax filing units and to increase deficits (primarily stemming from reductions in taxes) allocated to higher-income tax filing units.
Miscellaneous Guidance: Notice 2018-06 extends the due dates for certain 2017 information reporting requirements for insurers, self-insuring employers, and certain other providers of minimum essential coverage under section 6055 and for applicable large employers under section 6056. Specifically, the notice extends the due date for furnishing to individuals the 2017 Form 1095-B, Health Coverage, and the 2017 Form 1095-C, Employer-Provided Health Insurance Offer and Coverage, from January 31, 2018, to March 2, 2018. In addition, the notice extends transitional good-faith relief from section 6721 and 6722 penalties to the 2017 information reporting requirements under sections 6055 and 6056.