2006 Tax Law Changes - Expiring Provisions

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Individual

The following tax benefits have expired and will not apply for 2006.

  • Deduction from adjusted gross income for educator expenses.
  • Tuition and fees deduction.
  • Deduction for state and local general sales taxes.
  • District of Columbia first-time homebuyer credit (for homes purchased after 2005).
  • Qualified Contributions Expired. For 2006, you can no longer elect to treat gifts by cash or check as qualified contributions on Schedule A. Qualified contributions for which you made this election were not subject to the 50% of adjusted gross income limit or the overall limit on itemized deductions.


Business

  • Indian employment credit (for tax years beginning after 2005).
  • Accelerated depreciation for qualified Indian reservation property (for property placed in service after 2005).
  • 15-year recovery period for qualified leasehold improvements and qualified restaurant improvements (for property placed in service after 2005).
  • [X] Credit for electricity produced from a facility using solar energy (for a facility placed in service after 2005).
  • Expensing of environmental remediation costs (except for qualified contaminated sites in the Gulf Opportunity Zone) (for costs paid or incurred after 2005).
  • Suspension of the 100% of net income limit on percentage depletion for oil and gas from marginal wells (for tax years beginning after 2005).
  • Deduction for corporate donations of computer technology or equipment (for donations made in tax years beginning after 2005).
  • Certain tax incentives based on the designation of the District of Columbia Enterprise Zone (for any period after 2005).
  • Possessions corporation tax credit (for tax years beginning after 2005).
  • Work Opportunity Credit and Welfare-to-Work Credit. Generally, the work opportunity credit and the welfare-to-work credit have expired for wages paid to individuals who began working for you after 2005.
    • Hurricane Katrina exception. You can claim the work opportunity credit after 2005 only for wages paid to Hurricane Katrina employees. For more information, see Form 5884, Work Opportunity Credit.


Note: All of above, execpt for those marked with an [X], were extended by the Tax Relief & Health Care Act of 2006

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