[USA] proposed tax credit for domestic travel
#16
Join Date: Apr 2012
Posts: 615
It's being described as a credit versus a deduction. Credits reduce your tax liability on a 1-1 basis and don't require that you itemize. This is different than the mortgage interest deduction.
Of course only those who pay at least $4k in federal income tax can take advantage of the entire credit.
That said, I doubt this will happen, but we'll see.
Of course only those who pay at least $4k in federal income tax can take advantage of the entire credit.
That said, I doubt this will happen, but we'll see.
#17
Join Date: Jul 2009
Location: DCA/IAD
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Posts: 1,628
I thought a credit is something you get regardless, as long as you file? My income is virtually 0.. but I have savings. Would I not be eligible to get the $4,000 credit if I spend $8,000 on domestic travel, if I file my taxes for 2020 (even technically I don't have a require to file because my income is too low)? I thought credits are something that the taxpayer gets, as long as they're eligible, regardless of tax amount paid? I missed the tax "credit" from 2009 because I did not file taxes that year, because my income was also virtually nothing that year. But my understanding is that if I would have filed a tax return then I would have been eligible for the 2009 Great Recession credit. I think there was also one in 2001 that I missed too? Hopefully someone on these forums understands it and could clarify. Thanks!
#18
Join Date: Feb 2013
Location: LAX
Posts: 211
I thought a credit is something you get regardless, as long as you file? My income is virtually 0.. but I have savings. Would I not be eligible to get the $4,000 credit if I spend $8,000 on domestic travel, if I file my taxes for 2020 (even technically I don't have a require to file because my income is too low)? I thought credits are something that the taxpayer gets, as long as they're eligible, regardless of tax amount paid? I missed the tax "credit" from 2009 because I did not file taxes that year, because my income was also virtually nothing that year. But my understanding is that if I would have filed a tax return then I would have been eligible for the 2009 Great Recession credit. I think there was also one in 2001 that I missed too? Hopefully someone on these forums understands it and could clarify. Thanks!
So basically, no one can answer your question without seeing the specific law, since it could go either way. If it's a refundable credit you will be able to claim it, but if it's a non-refundable credit and you have no income (and thus no tax liability) you won't be able to claim it. If it does end up being a non-refundable credit, you could have some options even with no income depending on where your savings are. If you have some assets with unrealized capital gains you could realize and claim the credit against that, for example, but it's impossible to say without seeing your full financial situation. I would talk to a CPA if this ends up materializing and you are interested in using it.
Last edited by Seph87; Jun 25, 2020 at 7:24 am
#19
Join Date: Jun 2020
Posts: 6
I doubt this will become a law. It would be nice but not likely to happen.
#20
Join Date: Jul 2009
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#21
Suspended
Join Date: Jul 2001
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Posts: 102,095
I wouldn’t be a fan of this idea becoming law. And I say that even as I spend enough on travel to perhaps get some personal benefit from such an idea becoming law.
#22
Join Date: Dec 2014
Location: Haze gray and underway
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Posts: 1,783
Yes, It is amazing how crazy politics have become. Start with a wild and unsubstantiated wish / rumor (trial balloon). Let it float around a little and then slam it for it being unworkable and out of touch with reality. The great Karnack predicts it won’t happen. Because one side of the swamp will declare it a gift to the rich and racist. Of course I can say that as I have already pumped 25K into the travel industry since 1 April and things have been a little slow.