Expiring Tax Law Provisions

Tax laws change every year, making some provisions drop off while others get extended or even become permanent. Keeping track of which tax benefits are still around come tax time can be confusing.

Check out our quick overview of expiring credits and deductions below. See which provisions have expired or are scheduled to expire. Keep in mind it's still possible that new tax laws will be passed to bring some or all of the expired or expiring provisions back to life.

Provision	Outcome
Set to Expire After Tax Year 2005
Increased AMT exemptions	Extended and increased for 2007 only
Nonrefundable personal credits allowed for AMT	Extended through tax year 2006 only
The option to deduct state and local sales taxes instead of the state income tax deduction	Extended through tax year 2007
Educator's Expense "Teacher's" Deduction	Extended through tax year 2007
Tuition and Fees Deduction	Extended through tax year 2007
Work Opportunity Tax Credit and Welfare to Work Credit	The 2 credits were combined and extended through tax year 2007, eligibility for the credits will be expanded in 2007
Research and Development Credit	Extended through tax year 2007
15-year straight line depreciation for restaurant property	Extended through tax year 2007
DC tax incentives	Extended through tax year 2007
Indian reservation tax incentives	Extended through tax year 2007
Suspension of percentage depletion limitation	Extended through tax year 2007
Set to Expire After Tax Year 2006
Combat pay may be used to calculate EIC	Extended through tax year 2007
Retirement contributions — Saver's Credit	Has been made permanent
Set to Expire After Tax Year 2007
30% credit for residential energy-efficient property (residential solar water heating, solar electric equipment and fuel cell property)	Extended through tax year 2008
Credit for contractors who build new, energy-efficient homes	Extended through tax year 2008
Deduction for energy-efficient commercial buildings	Extended through tax year 2008
Credit for electricity produced from certain renewable resources	Extended through tax year 2008
New Markets Tax Credit	Extended through tax year 2008 and modified to allow investment in non-metropolitan counties
Set to Expire After Tax Year 2008
Reduced rates for capital gains and qualified dividends	Extended through 2010
Increased section 179 deduction and phaseout threshold ($100,000/$400,000 for 2007) adjusted for inflation; also increased for 2008 only under the Economic Stimulus Act of 2008 ($250,000/$800,000)	Extended through 2010