US—House W&M Comm submits tax reform bill | KPMG | GLOBAL

United States—House Ways & Means Committee submits tax reform bill for consideration

US—House W&M Comm submits tax reform bill

This report includes key amendments relevant to individuals and international assignment programs from TCJA “manager’s amendment” that will be voted on by the House.

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Today, November 9, 2017, House Ways and Means Committee Chairman Kevin Brady (R-TX) offered a “manager’s amendment” to the Tax Cuts and Jobs Act1, the House tax reform bill which was released on November 2, 2017. 

Later, the Ways and Means Committee voted to approve the bill, including those amendments. The House is expected to vote on the bill in the days to come.

See our analysis of the TCJA’s main provisions affecting global mobility in GMS Flash Alerts 2017-157 and 2017-161.2 In this alert, we highlight some amendments to the bill that were made today.

WHY THIS MATTERS

Tax reform was a key campaign promise of President Trump, and has long been a goal of Congressional Republicans. Control of the Presidency and both houses of Congress presents a rare opportunity to accomplish tax reform that advances goals that the party cherishes, although divergent opinion within the ranks means that true tax reform, as opposed to simple tax cuts, may be a difficult goal to attain. The Senate is expected soon to release its own tax reform bill.

As we have observed, the proposed changes to the individual income tax rates would affect the overall cost of equalized assignments to and from the United States. However, outcomes will vary depending on each taxpayer’s specific facts. In addition, significant changes to United States taxation may necessitate changes to the manner in which hypothetical tax and year-end tax equalization settlements are calculated.

Amendments to the TCJA

As noted above, on November 9, 2017, House Ways and Means Committee Chairman Kevin Brady (R-TX) offered a “manager’s amendment” to the TCJA, which will be incorporated into the language of the bill that will be voted on by the House. Key amendments relevant to individuals and international assignment programs include:

  • The initial version of the bill included a special 25 percent tax rate applicable to certain business income of individuals. The amendments provide for a rate of 9% on the first $75,000 of such income. The benefit of this lower rate would be phased out if taxable income exceeds $150,000 (these amounts are reduced by half for unmarried individuals). This lower tax rate would be phased in over five years.
  • The tax credit for qualified adoption expenses would be retained as in current law.
  • Reimbursements of qualified moving expenses would remain excludible from income in the case of a member of the Armed Forces on active duty who moves pursuant to a military order.
  • Proposed changes to taxation of deferred compensation have been deleted.

FOOTNOTES

1 See the text of the bill, H.R. 1, “Tax Cuts and Jobs Act.”

2. GMS Flash Alerts 2017-157 (November 2, 2017) and 2017-161 (November 7, 2017).

Join KPMG LLP’s Global Mobility Services for a Tax Reform webinar December 12, 2017

KPMG LLP’s Global Mobility Services will be hosting a webinar on December 12, 2017 at 2 pm EST to discuss tax reform and global mobility policy considerations. Registration will open soon, so look for the registration link on our Global Mobility homepage at www.kpmg.com/us/globalmobility.

The above information is not intended to be "written advice concerning one or more Federal tax matters" subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230 as the content of this document is issued for general informational purposes only.

The information contained in this newsletter was submitted by the KPMG International member firm in the United States.

© 2017 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

Flash Alert is an Global Mobility Services publication of KPMG LLPs Washington National Tax practice. The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

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