Trade Agreements OK'd By Tax-Writing Committees Would Include Tax Changes

On July 7, the House Ways and Means Committee and the Senate Finance Committee OK'd differing versions of three different trade agreements (Colombia, Panama, South Korea). Each of the trade agreements will be finalized by the White House and then returned to Congress for a vote.

Following are the tax changes in each of the trade agreements:

... Colombia: In the House Ways and Means version of this trade bill, estimated taxes for large corporations (those with assets of not less than $1 billion) otherwise due for July, August, or September of 2016, would be increased by 2.5%. The amount of the next required installment would be appropriately reduced to reflect the amount of the increase. The Senate Finance version of this trade bill does not include this estimated tax increase.

... Panama: In the House Ways and Means version of this trade bill, estimated taxes for large corporations (those with assets of not less than $1 billion) otherwise due for July, August, or September of 2016, would be increased by 0.25%. The amount of the next required installment would be appropriately reduced to reflect the amount of the increase. The Senate Finance version of this trade bill does not include this estimated tax increase.

... South Korea: There are no tax changes in the House Ways and Means version of this trade bill, but the Senate Finance version has a number of tax changes, including: termination of the Code Sec. 35 health care tax credit (for certain Trade Adjustment Assistance (TAA) and Pension Benefit Guaranty Corporation (PBGC) pension recipients) at the end of 2013, a modification of the credit, and extension of the advance payment provisions; extension of COBRA continuation benefits for certain trade TAA recipients and certain PBGC pension recipients through the end of 2013; an increase from $100 to $500 in the Code Sec. 6695 penalty on paid preparers who fail to comply with earned income tax credit due diligence requirements, effective for returns required to be filed after 2011; and a requirement for U.S. prisons to provide certain information about inmates for tax administration purposes.