On Friday, May 28, 2021, the U.S. Treasury Department released its “Green Book” (General Explanation of the Administration’s Fiscal Year 2022 Revenue Proposals), which provides details with respect to the tax proposals contained in the Biden administration’s budget for the fiscal year beginning October 1, 2021.1 This GMS Flash Alert highlights the individual income tax proposals contained in Treasury’s Green Book that may impact global mobility programs and their assignees.
While the Treasury’s Green Book provides a description of proposals that lawmakers may introduce as legislation, and thus Congress can be expected to add, drop, and modify proposals as it considers implementing legislation, it nevertheless provides valuable details concerning individual income tax proposals that may be incorporated into future legislation. Even though a majority of the individual income tax proposals contained in the Green Book were outlined in the American Families Plan Fact Sheet that was released by the White House on April 28,2 the Green Book provides additional technical details, such as effective dates, that were not included in the American Families Plan Fact Sheet.
The Treasury’s Green Book includes the following individual income tax proposals:
The Green Book also proposes a number of oversight and reporting requirements that would impact individuals:
Notably, the Green Book did not include the following income tax proposals:
KPMG LLP (U.S.) is actively monitoring the progress of these proposals through the legislative process and will endeavor to advise of any significant developments.
1 The full text of the Green Book can be found at: https://home.treasury.gov/system/files/131/General-Explanations-FY2022.pdf . The Treasury press release on the release of the Green Book can be found at: https://home.treasury.gov/news/press-releases/jy0204 .
2 See GMS Flash Alert 2021-126 (April 28, 2021) for an overview of the individual income tax proposals contained in the American Families Plan.
3 The 2017 tax law commonly known as the “Tax Cuts and Jobs Act” temporarily lowered the top individual tax rate to 37 percent for tax years 2018 through 2025. In taxable year 2022, the top marginal tax rate would apply to taxable income over $509,300 for married individuals filing a joint return, $452,700 for unmarried individuals (other than surviving spouses), $481,000 for head of household filers, and $254,650 for married individuals filing a separate return. After 2022, the thresholds would be indexed for inflation using the C-CPI-U, which is used for all current tax rate thresholds for the individual income tax.
4 See GMS Flash Alert 2021-079 (March 10, 2021) for an overview of the changes the American Rescue Plan Act made to the child tax credit.
5 See GMS Flash Alert 2021-079 (March 10, 2021) for an overview of the changes the American Rescue Plan Act made to the child and dependent care tax credit.
6 See GMS Flash Alert 2021-079 (March 10, 2021) for an overview of the changes the American Rescue Plan Act made to the limitation on excess business losses for noncorporate taxpayers.
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 United States.
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