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Technical Corrections
The Act includes technical corrections.
Amendments to the Economic Growth and Tax Relief
Reconciliation Act of 20011
- Section 6428 credit interaction with refundable child tax credit
- Child tax credit
- Transition rule for adoption tax credit
- Dollar amount of credit for special needs adoptions
- Employer-provided adoption assistance exclusion with respect to special needs
adoptions
- Credit for employer expenses for child care assistance
- Elimination of marriage penalty in standard deduction
- Education IRAs; non-application of 10-percent additional tax with respect to amounts
for which HOPE credit is claimed
- Transfers in trust
- Recovery of taxes claimed as credit (state death tax credit)
Pension-Related Amendments to the Economic Growth and
Tax Relief Reconciliation Act of 20012
- Individual Retirement Arrangements (IRA)
- Increase in benefit and contribution limits
- Modification of top-heavy rules
- Elective deferrals not taken into account for deduction limits
- SEP deduction limits
The annual limit on the amount of a deductible contribution
that can be made to a Simplified Employee Pension (SEP) is increased
to 25 percent from 15 percent of compensation. This is a conforming
change to the rule that limits the amount of SEP contributions that
may be made for a particular employee.
- Nonrefundable credit for certain individuals for elective deferrals and IRA
contributions
- Small business tax credit for new retirement plan expenses
- Additional salary reduction catch-up contributions
- Equitable treatment for contributions of employees to defined contribution
plans
- Rollovers of retirement plan and IRA distributions
- Employers may disregard rollovers for purposes of cash-out amounts
- Notice of significant reduction in plan benefit accruals
- Modification of timing of plan valuations
- ESOP dividends may be reinvested without loss of dividend deduction
Amendments to the Community Renewal Tax Relief Act of
20003
- Phaseout of $25,000 amount for certain rental real estate under passive loss
rules
- Treatment of missing children
- Basis of property in an exchange by a corporation involving assumption of
liabilities
- Tax treatment of securities futures contracts
Amendment to the Tax Relief Extension Act of 19994
- Taxable REIT subsidiaries -- 100-percent tax on improperly allocated amounts
Amendments to the Taxpayer Relief Act of 19975
- Election to recognize gain on assets held on January 1, 2001
- Treatment of gain on sale of principal residence
- Treatment of disposition of interest in passive activity
Amendments to the Balanced Budget Act of 19976
Amendments to other Acts
- Advance payments of earned income credit
- Coordination of wash sale rules and section 1256 contracts
- Disclosure by the Social Security Administration to federal child support
enforcement agencies
- Treatment of settlements under partnership audit rules
Clarification that the TEFRA partnership audit procedures
covering settlement agreements entered into by the Treasury Secretary
also apply to settlement agreements entered into by the Attorney
General. Settlement agreements entered into by the Attorney General
with a partner with respect to partnership items will convert to
nonpartnership items, thus permitting other partners to request
consistent settlement terms. Similar changes are made to related
provisions with respect to settlement agreements.
- Clarification of permissible extension of limitations period for installment
agreements
- Determination of whether a life insurance contract is a modified endowment
contract
Additional Corrections
- Adoption credit and employer-provided adoption assistance exclusion rounding
rules
- Dependent care credit
The information contained herein is of a general nature and based on authorities that are subject to change.
Applicability to specific situations is to be determined through consultation with your tax adviser.
1 Pub. L. No. 107-16.
2 Pub. L. No. 107-16.
3 Pub. L. No. 106-554
4 Pub. L. No. 106-170.
5 Pub. L. No. 105-34.
6 Pub. L. No. 105-33.
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