November 28, 2018

Tax discussions underway in Congress; NAFCU vigilant

Capitol domeHouse Ways and Means Committee Chairman Kevin Brady, R-Texas, this week released a tax and oversight package that includes some tax extenders, as well as provisions related to tax filings and retirement and other savings. NAFCU remains vigilant to ensure the credit union industry's tax-exempt status is untouched during any tax reform efforts.

The proposed tax package includes an extension ensuring that mortgage debt that has been forgiven by a lender will be excluded from the borrower's personal income. It also includes an extension of the treatment of mortgage insurance premiums as qualified residence interests, allowing a borrower to deduct the cost of the premiums from income taxes.

It is unclear how soon the House will take up this package and if it will be addressed in the Senate before the end of the year.

Brady has been a leader during tax reform efforts, including last year's Tax Cuts and Jobs Act (TCJA). NAFCU met with Brady in June to thank him for his role in preserving the industry's tax exemption.

In September, the House passed three bills that constituted "Tax Reform 2.0," another effort led by Brady. The package contained provisions related to individual, family and small business tax cuts included in TCJA, retirement savings and startup businesses; it maintained credit unions' tax status. No action on these bills is expected in the Senate.

NAFCU has long defended the industry's tax status and the association's advocacy was featured in this Wall Street Journal article earlier this year. An independent study commissioned by NAFCU found the credit union tax exemption provides a $16 billion per year benefit to the U.S. economy and allows credit unions to offer better loan and deposit rates to consumers.