Changes to the Tax Cuts and Jobs Act were released late on November 14 by Senator Orrin Hatch.  These changes are being made to the original Senate Finance Committee Chairman's mark of the bill.

Some of the changes bring the Senate bill into conformity with similar provisions in the House Bill, while others (such as the removal of the shared responsibility payment beginning in 2019 that has gotten much press coverage) are brand new provisions not seen in the House bill.  The revisions also serve to bring the Senate Bill into compliance with the Byrd rule.

The Joint Committee on taxation has released an explanation of these changes.

The revisions include:

• Removed from Senate Bill
  • Deferred compensation provisions
  • Worker classification and reporting revisions
  • No expansion of early distribution tax to 457 plans
  • Elimination of catch-up contributions for high income  employees
• In 2019 individual shared responsibility payment will be set to zero
• Rates set to 12%, 22%, 24%, 32%, 35% and 38.5% and lower brackets expanded
• Child tax credit raised to $2,000
• Individual cuts, child credit and passthrough deduction expire at the end of 2025
• Passthrough 17.4% deduction
  • W2 rule only applies to taxpayers with taxable income over $500,000 ($250,000)
  • Same rule for applying deduction to service enterprises
• Longer depreciation period for farms opting to get full interest deduction
• Qualified film, television and live theatrical production property will qualify for 100% bonus depreciation
• ADS period for residential rentals shortened to 30 years
• Net operating loss offset limited to 80% of taxable income for years beginning in 2023
• No deduction for meals provided for the convenience of the employer
• Allows additional ABLE contribution if made by beneficiary up to the lesser of
  • Federal poverty level or
  • Beneficiary’s compensation for the year
• ABLE contributions qualify for Saver’s Credit
• Rollovers between 529 plans and ABLE plans
• Extend time to contest IRS levy from nine months to two years
• Relief for improper levy on retirement account to allow for “late” rollover and return of earnings
• Prohibits increase in user fees for installment agreements
• Additional year to claim refund for improperly incarcerated individuals
• Increase deduction above the line for educator expenses to $500
• No deduction for attorneys for litigation costs for expenses paid on contingent fee cases until contingency resolved
• New Form 1040SR for simplified return for those over 65
• Allow 529 plans to be set up for unborn child
• Amortize research expenditures over 5 year period for expenses paid after 2025
• Business credit equal to 12.5% of wages paid for employees on FMLA leave if pay at least 50% of regular – and increased if greater (up to 25%) (only applies for 2018 and 2019)
• Modifications to low income housing credit
• ESBT beneficiaries expanded to include nonresident aliens
• ESBT subject to individual (not trust) rules for charitable contributions
• Allows some fines to be deducted if show in the nature of restitution
• Special rules for replanting of citrus crop following casualty loss
• No deduction for sexual harassment or abuse subject to a nondisclosure agreement
• Remove rule allowing alternative charity reporting charitable contribution substantiation
• Bar recharacterization of Roth IRA contributions/rollovers
• Extended period to rollover deemed plan loan distributions
• Change stock option/RSU taxation
  • Must elect to defer recognition upon vesting (otherwise immediately taxable)
  • Can delay no more than 5 years 
  • Stock can’t be publicly traded
  • Additional limitations apply
• Some changes will disappear in 2026 if 10 year revenue target met
  • Net operating loss deduction 80% rule
  • Denial of deduction for meals provided for convenience of employer
  • Amortization of research expenditures