In Revenue Procedure 2022-38, released on October 19, 2022, the IRS issued the tax year 2023 annual inflation adjustments.  It includes changes to over 60 tax provisions, many of which will be relevant to taxpayers filing their returns in 2024.

In late September 2022, the IRS released Notice 2022-44, which outlined the changes coming to the special per diem rates used by taxpayers to substantiate ordinary and necessary business travel expenses.  Beginning October 1, the rates are slightly higher.

In June 2022, New Jersey Governor Phil Murphy signed the Fiscal Year 2023 Appropriations Act, also known as the State’s budget for the coming fiscal year.  One highlight of the budget is the Affordable New Jersey Communities for Homeowners and Renters Property Tax Relief Program (ANCHOR).  This program replaces the Homestead Benefit program and will provide relief to double the number of homeowners and also include renters, which the previous program did not.

In late August, President Biden signed the Inflation Reduction Act into law. As the name suggests, the legislation is designed to help counter the ill effects of inflation while creating new jobs, lowering healthcare costs, revitalizing manufacturing, and promoting clean energy investment. Key priorities in the legislation include the reduction of carbon emissions and the investment in domestic clean energy manufacturing. To facilitate the changes, several tax updates have been introduced including a 15% corporate minimum tax, a 1% stock buyback fee, and bolstered IRS tax enforcement efforts. There are also new and expanded tax incentives to promote clean energy investments. These incentives create a unique opportunity for real estate and construction companies to obtain significant tax savings.

In a memorandum released in September 2022, the IRS has confirmed that if a PPP loan was forgiven based on misrepresentations or omissions by the taxpayer, the taxpayer is not eligible to exclude the forgiven amount from income.  Any portion of the loan proceeds that were forgiven in error must be included in their gross income. 

Pennsylvania lawmakers finally reached an agreement this summer to reduce the state’s corporate net income tax (CNIT) rate.  With the enactment of House Bill 1342 as a component of the 2022-2023 fiscal year state budget, signed into law by Governor Wolf in early July, the nation’s second highest state corporate tax rate will see a substantial decrease.

Although the news has been filled with stories about inflation and rising interest rates, there has been a new change which is good news for many Hamilton taxpayers. In early July, the IRS has extended the timeframe by which qualifying estates can make a portability election. This is an important development for estates of married couples, as they’ll have up to five years after the first spouse’s death to combine both lifetime exclusion amounts. The result is a new opportunity to minimize federal estate and gift tax exposure.

On June 30, 2022, after passage by the State Senate, New Jersey Governor Phil Murphy signed the Fiscal Year 2023 Appropriations Act, also known as the State’s budget for the coming fiscal year.  At $50.6 billion, it is the largest budget in the State’s history and includes a record $6.8 billion surplus.

In early June, the Philadelphia City Council passed a bill that will soon require certain local businesses to provide employees with benefits towards mass transit or bicycle commuting expenses, as more workers return to offices following COVID-19 closures.

Maintaining compliance with state tax laws can be challenging for individuals and businesses, especially those companies that operate across state lines. Unlike the federal government, each state enacts its own tax laws, which often vary from jurisdiction to jurisdiction. These differences can be confusing and open the door to potential reporting issues with income and other taxes. Not only does this result in missed tax payments, but it can also cause the assessment of additional fines, penalties, and interest.