Lately on the Hill
Last week, Congress was focused on passing the Respect for Marriage Act and legislation to prevent a nationwide railway strike. This now makes way for the 2023 fiscal spending package—likely the last legislative vehicle for any tax provisions in this session before Republicans take control of the House in January. The first hurdle to overcome is coming up with a topline spending amount for FY 2023 appropriations, which is the number Congress is willing to spend to fund the government for the rest of the fiscal year. Once that’s determined, all the policy riders—from healthcare to tax—will be negotiated and decided.
- According to Senate Appropriations Ranking Chairman Richard Shelby, Senate Republicans have a topline number of $1.7 trillion for discretionary spending, which is the number in President Biden’s proposed 2023 budget.
- Senate Republicans want to raise defense spending to the level appropriated by the Armed Services Committee in the annual defense authorization bill, which is also waiting in the sidelines. This amount is $45 billion more than the number put out by the Biden administration for national security programs.
- Senate Republicans are also against putting any more funding into domestic programs, claiming that Democrats already boosted non-defense spending for the year by passing the Inflation Reduction Act (IRA). Senate Democrats are asking for $26 billion more on non-defense spending.
- President Biden is also requesting $9 billion for long-term COVID-19 expense funding, which Republicans generally do not support.
For additional background: the federal government’s fiscal year begins October 1. However, instead of passing a new FY 2023 budget back in October, Congress instead extended the FY 2022 spending levels through December 16. Now, they must decide if they’ll just extend the FY 2022 spending levels for the rest of FY 2023, or if they’ll pass a new omnibus spending bill with updated appropriations for 2023.
Timing: Word on the street is that Congress is waiting on the results from this week’s run-off election in Georgia before earnestly proceeding with a government funding bill. The current continuing resolution expires December 16; however, Congress is expected to extend the continuing resolution through December 23 to give them more time to negotiate. As such, we expect to have more clarity on this front next week.
IN CASE YOU MISSED IT
- Treasury and the IRS have issued the first round of initial guidance under the IRA. Notice 2022-61 provides guidance on how to satisfy the prevailing wage and apprenticeship requirements for enhanced tax benefits under the IRA. This guidance is most relevant to builders, developers, and owners of clean energy facilities. Note: this guidance starts the 60-day “clock” in which taxpayers must begin construction of a facility to receive the enhanced tax benefits without satisfying the prevailing wage and apprenticeship requirements.
- The Senate Committee on Agriculture, Nutrition & Forestry, which oversees digital commodities, held its first hearing on the FTX cryptocurrency exchange collapse. The Chairman of the Commodity Futures Trading Commission (CFTC) testified on the need for legislation to allow the CFTC more authority to regulate digital assets.
- The EPA is seeking public comments on required volumes of biofuel for the next one to three years and on a series of modifications to expand the Renewable Fuel Standard program.
- Treasury issued corrections to the final regulations published in October fixing the so-called “Family Glitch” under the Affordable Care Act. This correction contains final regulations under Section 36B that amend the regulations regarding eligibility for the premium tax credit to provide for affordability of employer-sponsored minimum essential coverage (employer coverage) for family members of an employee.
- A group of House Representatives is asking the IRS to delay the implementation of the new lower reporting threshold on Form 1099-K. Under the American Rescue Plan, the qualifying transaction threshold was lowered from $20,000 on 200 or more transactions to $600. This change is effective for 2022.
- More than 2,500 businesses and organizations are asking Congress to include housing credit provisions in any year-end legislation.
- A coalition of adoption advocacy groups is asking Congress to reinstate refundability for an adoption tax credit in any end-of-year legislation, a move they say will help make adoption more affordable, according to a letter sent to the House Ways & Means and Senate Finance Committees.
- The IRS has issued interest rates for the first calendar quarter of 2023, underpayments, and overpayments.
- The IRS has updated the FAQs for the 2020 unemployment compensation exclusion in Fact Sheet 2022-39.
This newsletter features developing content that is subject to change at any time. It does not constitute legal or tax advice. Consult your professional advisors prior to acting on the information set forth herein.