Update on state adoption of extender legislation:
Illinois
Adopting the extender legislation
Iowa
Iowa will not conform with any of the extenders listed below for tax year 2017, or any future year, unless the legislature acts to do so. Iowa also did not conform with any of the three extenders listed for tax year 2016, and the department already has some guidance on the effects of non-conformity with these specific provisions available on our website.
Sec. 40201. Extension of exclusion from gross income of discharge of qualified principal residence indebtedness.
Sec. 40202. Extension of mortgage insurance premiums treated as qualified residence interest.
Sec. 40203. Extension of above-the-line deduction for qualified tuition and related expenses.
Minnesota
Minnesota has not adopted these federal changes.
Kentucky
Adopting the extender legislation
Montana
Adopting the extender legislation
Oregon (Updated 3/6)
As you may already know, the 2018 session of the Oregon Legislative Assembly has ended. The legislature didn’t disconnect from the federal extenders in the “Bipartisan Budget Act of 2018” (HR 1892, Public Law 115-123). For the 2017 tax year, Oregon taxpayers may claim the Oregon tuition and fees deduction (subtraction code 308) if they claimed the federal American Opportunity or Lifetime Learning credit. Taxpayers are also allowed to claim the itemized deduction for mortgage insurance premiums, and may exclude discharged debt on their principal residence from their taxable income. Use the ‘Reserved’ element (line 13) to claim the mortgage insurance premium on the Oregon Only Schedule A.
If taxpayers filed a return that claimed the tuition and fees deduction or subtraction, or the mortgage insurance premium itemized deduction, and their return was adjusted in processing, we will automatically re-adjust the return. There is no need to file an amended return unless the taxpayer chose to file without including these items and now wants to claim them.
South Caroline (Updated 3/14)
The South Carolina Department of Revenue (SCDOR) is providing an update to individuals, tax preparers, and tax software companies regarding the federal tax provisions recently renewed for tax year 2017.
South Carolina has not yet adopted the federal tax provisions that were retroactively renewed for tax year 2017 in the Bipartisan Budget Act of 2018 (enacted February 9, 2018). Legislative action is needed before these provisions can be claimed on 2017 South Carolina income tax returns.
Federal tax provisions available for 2017 federal tax returns that have not been enacted by South Carolina include:
- Exclusion from gross income of discharge of qualified principal residence indebtedness (often, foreclosure-related debt forgiveness), claimed on Form 982.
- Mortgage insurance premiums treated as qualified residence interest, claimed on Schedule A.
- Deduction for qualified tuition and related expenses claimed on Form 8917.
- Deduction for out-of-pocket medical expenses that exceed 7.5% of adjusted gross income (rather than 10%).
Taxpayers in the process of completing 2017 South Carolina income tax returns have several options while awaiting legislative action:
- Postpone filing your tax return until closer to the filing deadline. This may avoid the possibility of needing to file an amended return later. The 2017 South Carolina Individual Income Tax returns are due April 17, 2018. Taxpayers filing electronically have until May 1 to file and pay the balance due without penalty.
- File your South Carolina tax return now based on current South Carolina law and make adjustments on your South Carolina return for the federal provisions that South Carolina has not yet adopted. You can amend your South Carolina tax return later to claim one of the renewed tax benefits if South Carolina adopts the provision during the legislative session.
- Extend your South Carolina tax return and wait until the end of the South Carolina legislative session to file. This may avoid the possibility of needing to file an amended return later. Extended 2017 South Carolina Individual Income Tax returns are due by October 15, 2018.
Wisconsin
Tuition and fees has never been allowed and discharge of indebtedness on principal residence is added back. WI will be releasing new schemas soon
Updated 2/21
The first set of extenders that will be rolled out is for:
- Tuition and Fees
- PMI
The IRS is still working to release updated forms and instructions for the other items.
Important Note:
Due to the recent passing of the Bipartisan Budget Act of 2018, certain expired federal provisions have been reinstated such as the Tuition and Fees deduction and the Mortgage Insurance premiums deduction. Each individual state will determine if and when they will conform with those federal changes. If you file a state return prior to the state making their decision to conform or not you may be required to file an amended return.”
TaxSlayer recommendation: Once we deliver these two items, we recommend that you create a return tag if the return has one of these two items in it and a state return. As of today, we do not know if the state(s) are going to adopt the extenders. Once your state makes a decision, you can run a “Tags report” and review the state returns to see if any adjustments need to be made.
~~~~~ Original Blog Post ~~~~~
We are in the process of implementing the once expired extenders into the application. We are planning to release these in the next few days. As we get closer to a release, we will keep this blog post updated.
Blog posted 02/20/2018