Tax Credit for travel

[fredflint]

I was working around the house and heard that they were thinking about a tax credit for travel does anyone have any more information or think that it could actually happen?

 

I found this

 

What is the ‘Explore America’ tax credit, and how might it work?

The “Explore America” tax credit was brought up in President Donald Trump’s remarks at a roundtable of restaurant industry executives in May — earning the approval of the Independent Restaurant Coalition and the U.S. Travel Association. The proposal would allow Americans to get a tax credit up to $4,000 on domestic travel, which in turn could help speed up the recovery of the U.S. travel industry.

The tax credit would let individuals claim a credit up to 50 percent of their expenses made at U.S. airlines, rental car companies, theme parks, hotels and restaurants in 2020 and 2021. However, there are still many details that have yet to be answered, so it’s a bit foggy on what this stimulus option could mean for consumers.

Is a travel stimulus plan likely to be approved?

The goal of the “Explore America” bill would be to incentivize consumers to support restaurants, airlines and hotels — all businesses that have taken an especially hard hit because of COVID-19. In fact, it’s estimated that the U.S. travel industry will see a 40 percent drop in spend, according to the U.S. Travel Association.

Given that staggering number, it’s not surprising that tourism boards have cheered the proposal.

“Travel supported jobs for 1 in every 10 Americans before the pandemic, and measures to incentivize travel will not only give people a renewed appreciation for this great country in which we live, but they are an efficient and effective way to ignite a recovery and restore jobs in every corner of the nation,” according to the U.S. Travel Association in a May 19 press release.

Would the tax credit motivate people to travel?

While it would likely provide much-needed relief to tourism workers, the question remains: Would the tax credit be enough to motivate people to travel given the current health and safety risks?

“It’s too far disconnected,” says Francine Lipman, a professor of law at University of Nevada Las Vegas and former CPA. “It would end up being a windfall for people who were going to spend that money anyway, so that doesn’t achieve the goal (of stimulating the economy).”

 

Edited June 25, 2020 by fredflint

[mugtech]

19 minutes ago, fredflint said:

“It’s too far disconnected,” says Francine Lipman, a professor of law at University of Nevada Las Vegas and former CPA. “It would end up being a windfall for people who were going to spend that money anyway, so that doesn’t achieve the goal (of stimulating the economy).”

 

I agree.  We could get a tax credit for eating at local restaurant to which we can take public buses for free, never leave the city, never spend a dime on actual travel.  Trying to only allow people to get the credits for out of town spending could be complicated, easy to get around.  Could trade receipts with a friend in California.

[nelblu]

Did not hear about this.  Interesting concept to get the T&E industry going.

[fredflint]

It would be interesting, but knowing how they do stuff you would need to spend at least $2,000.00 on the vacation and there would be an income limit of 100K for a family in order to take advantage of the credit.

 

Note that cruising would not be included other than riverboat, of course right now it is just an idea.

[firefly333]

Well knowing how the two parties work together hard to imagine them agreeing on helping the economy. Sounds like just talk to me. Ideas being thrown out one party wants

[twangster]

Where would funding for such a tax credit come from?

 

The feds have already spent trillions related to COVID-19 that ultimately will be a tax burden.  A tax credit funded by money that is ultimately a tax burden back to the people looks like a bad idea.

[pcur]

Well, we're halfway through 2020 right now, and many states are still struggling with COVID19 case/hospitalization increases.  Some are not letting non-residents even come in the state, or you have to quarantine if you do.  So, a bunch of the travel credit opportunity is useless.  

 

I would be better if the credit was more like the stimulus checks:  give us a debit card that can only be used on certain travel related purchases, and we get 2 years to use it up.

 

I don't think it even applies to us if it's a true tax credit, because we pay no Fed or State income tax, so there's nothing to credit.

[cured]

19 minutes ago, twangster said:

Where would funding for such a tax credit come from?

 

The feds have already spent trillions related to COVID-19 that ultimately will be a tax burden.  A tax credit funded by money that is ultimately a tax burden back to the people looks like a bad idea.

Maybe they can get the billion or so dollars back that they sent to dead people.

[Merion_Mom]

Of all the ways that government could be helpful right now, this would not even be on my list of the top 1000 ways.

[Eddie Wilson]

1 hour ago, cured said:

Maybe they can get the billion or so dollars back that they sent to dead people.

 

Actually, IRS should receive these dollars back.  Their choice was speed or accuracy.  In the interest of a speedy distribution of the Stimulus check, they knew they could not cross check all individuals. So into the system they built a return policy.   

 

Per IRS..................

A payment made to someone who died before they received the payment should be returned to the IRS. Return the entire payment unless it was made to joint filers and one spouse is still living. In that case, return half the payment, but not more than $1,200.

If someone can't deposit a check because it was issued to both spouses and one spouse has died, the individual should return the check. Once the IRS receives and processes the returned payment, an Economic Impact Payment will be reissued to the surviving spouse.

The IRS encourages people to share this information with family and friends.

 

 

So they realized this was going to happen and again, in an effort to speed up the cash distributions, they chose this method.  Unfortunately the reports I read reported half the story.  Those report outlets were also the ones complaining in late March that a mid-April distribution of the economic stimulus payment was too slow...........?  Can't win either  way.

 

As for the original poster, I think I saw in the past few days that the "travel credit" was shot down, but a second stimulus check is being considered.   

 

Eddie   

[fredflint]

The news is from one day ago but they do say chances are slim, but again it is interesting how they think they need to do things vs just lowering taxes for a year.  The less taxes people have to pay the more $$ they have to spend, my spouse and I have been fortunate enough to be fully employed during the whole Covid and have stayed healthy.   We are doing our little part in ordering food eating takeout from restaurants and tipping a bit more than usual ( OK quite a bit more 20.20 for a 30 buck haircut 🙂

 

[firefly333]

25 minutes ago, fredflint said:

The news is from one day ago but they do say chances are slim, but again it is interesting how they think they need to do things vs just lowering taxes for a year.  The less taxes people have to pay the more $$ they have to spend, my spouse and I have been fortunate enough to be fully employed during the whole Covid and have stayed healthy.   We are doing our little part in ordering food eating takeout from restaurants and tipping a bit more than usual ( OK quite a bit more 20.20 for a 30 buck haircut 🙂

 

The problem again is one party wants to lower taxes, the other wants to increase taxes and hand out more incentives.

 

From what I've heard even on something simple the parties have agreed there is no meeting of the minds enough to put anything in writing. Vacation time coming up for them.

 

Dont hold your breath

[BND]

Oh good.  More taxes for us to pay down the line.  We didn't qualify for the stimulus checks and only one of our sons did but only because his wife doesn't work.  We live in a high cost of living area with high median incomes.  Not that we needed it, but neither did some people who received it.  And honestly, I don't want the Gov to be handing out money as there's always the piper to pay.  Nothing is free, ever.

Edited June 25, 2020 by BND

[fredflint]

1 hour ago, firefly333 said:

The problem again is one party wants to lower taxes, the other wants to increase taxes and hand out more incentives.

 

From what I've heard even on something simple the parties have agreed there is no meeting of the minds enough to put anything in writing. Vacation time coming up for them.

 

Dont hold your breath

Nope don't see it happening but them again I don't understand the 6K tax credit for electric cars either?

[firefly333]

28 minutes ago, fredflint said:

Nope don't see it happening but them again I don't understand the 6K tax credit for electric cars either?

I thought that went away this tax year? 

[Biker19]

35 minutes ago, firefly333 said:

I thought that went away this tax year? 

The tax phases out once a maker produces a certain amount of cars - Tesla is past the limit, other makers may not be.

[firefly333]

2 hours ago, Biker19 said:

The tax phases out once a maker produces a certain amount of cars - Tesla is past the limit, other makers may not be.

I dont really follow politics, but follow stocks, and someone said Tesla was still selling even with tax credit gone. 

 

Thanks for the update. 

 

Though some value guy from a brokerage said Tesla was one of 3 stocks he wouldnt be holding right now. Crazy high pe like a tech stock.

 

I'm just watching it. Interesting 

Edited June 26, 2020 by firefly333

[ONECRUISER]

7 hours ago, pcur said:

Well, we're halfway through 2020 right now, and many states are still struggling with COVID19 case/hospitalization increases.  Some are not letting non-residents even come in the state, or you have to quarantine if you do.  So, a bunch of the travel credit opportunity is useless.  

 

I would be better if the credit was more like the stimulus checks:  give us a debit card that can only be used on certain travel related purchases, and we get 2 years to use it up.

 

I don't think it even applies to us if it's a true tax credit, because we pay no Fed or State income tax, so there's nothing to credit.

You'd be surprised, after couple Months lock down, no school, work or working from Mobile Computer there is already lot more people Traveling this Summer then you realize. 

Edited June 26, 2020 by ONECRUISER

[fredflint]

2 hours ago, Biker19 said:

The tax phases out once a maker produces a certain amount of cars - Tesla is past the limit, other makers may not be.

here is the site quite a few cars still have tax credits

 

low is 4000 high is 7500  this is a tax credit too not a deduction, if you lease they take it right off the price of the car.  Resale value also drops since it only applies to new.  A one year old EV could cost more than a new one!

 

https://www.fueleconomy.gov/feg/taxevb.shtml

 

 

[mugtech]

13 hours ago, pcur said:

think it even applies to us if it's a true tax credit, because we pay no Fed or State income tax, so there's nothing to credit.

Could be a refundable credit or could inspire you to take more out of your IRA so that the credit would cover the resulting tax.

[Seville2Cabo]

18 hours ago, pcur said:

 

I don't think it even applies to us if it's a true tax credit, because we pay no Fed or State income tax, so there's nothing to credit.

I want to know your secret for paying no taxes.  I’d give up a credit for no taxes

[fredflint]

5 hours ago, mugtech said:

Could be a refundable credit or could inspire you to take more out of your IRA so that the credit would cover the resulting tax.

You just have someone else pay for the cruise for you like your kids, or you take more $$ out of your 401k that would be taxable.

[firefly333]

Stu barney just talked about this. A up to $4k tax CREDIT, for vacationing within thr United states.

 

Nothing that hit cruises, except someone said maybe river cruises. 

[pcur]

11 hours ago, Seville2Cabo said:

I want to know your secret for paying no taxes.  I’d give up a credit for no taxes

 

1.  Be retired and have two Social Security incomes.  

2.  Keep your other taxable income to a minimum.

3. Be over maximum age for SS.

 

As you age, your SS income getting to the point of being non-taxable.  With the standard deductions and tax credits being what they are, all your taxable income can be offset by those and itemized deductions.  It's a balancing act.

[pcur]

16 hours ago, mugtech said:

Could be a refundable credit or could inspire you to take more out of your IRA so that the credit would cover the resulting tax.

 

Not a bad idea.