We typically see Congress extend these kinds of things but in the current environment, that may not happen.  So, here are a few of the tax rules that have expired:

  • The 1 year increase in the child tax credit expired at the end of 2021.  The credit will revert back to $2000 (from $3000).  Also, the age limit is reduced back to under 17 (from under 18), and is no longer fully refundable ($1400 max).  Phaseouts for the credit have also reverted back to the lower levels that existed prior to 2021.
  • The 1 year only increase in the dependent care credit also expired at the end of 2021.  It reverts back to 20% (from 50%); reverts back to a very low AGI phaseout beginning at $15000; and lowers qualified expenses back to $3000 for 1 child ($6000 for more than 1 child) from the one year only amounts of $8000 and $16000.
  • The $600 non-itemizer charitable deduction amount expired at the end of 2021.
  • The 2021 increases to the earned income credit for taxpayers without children and for older and younger Americans reverts back to 2020 rules.
  • The 100% of AGI charity deduction for cash contributions reverted back to a 60% limit.
  • The credits for nonbusiness energy property (insulation, storm windows and doors, etc.) and alternative fuel refueling (electric car chargers) expired at the end of 2021.
  • The deduction for mortgage insurance premiums as mortgage interest expired at the end of 2021.
  • Cafeteria plan deferrals for child care revert back to $5000 from $10,500.

Selected Expired Business Tax Items

  • Full expensing of R&D costs changes from 2021 to a 5 year amortizing asset deduction in 2022.
  • The business interest expense deduction goes from 30% of EBITDA (earnings before interest, taxes, depreciation and amortization) in 2021 to 30% of EBIT (earnings before interest and taxes) in 2022.
  • The 1099-K reporting threshold of $20,000 for 2021 has been dropped to $600 for 2022.
  • The Employee Retention Credit for all businesses, including startups, expired at the end of 2021, although it may still be claimed on amended 941’s for 2021 and 2020. 
  • The 3-year recovery period for racehorses two years old or younger also reverted back to 7 years for 2022.

We’ll try and post again towards the end of the year if Congress makes any changes.