American Taxpayer Relief Act of 2012 - Businesses

January 7, 2013

On January 2, 2013 President Obama signed the American Taxpayer Relief Act of 2012 (Act) which is intended to address some of the tax consequences of the "fiscal cliff". The Act permanently extends a large number of tax items from the 2001 and 2003 tax acts and other expired tax provisions. The following is a summary of the major tax provisions of the Act.

Major Provisions Affecting Businesses

Business Tax Extenders
Some of the business provisions extended through 2013 include:

  • Extension and modification of bonus depreciation;
  • Increased expensing limitations and treatment of certain real property as Section 179 property;
  • Research credit;
  • Small business employer wage credit for employees who are active duty military reservists;
  • Work opportunity tax credit;
  • Fifteen-year straight-line cost recovery for qualified leasehold improvements, qualified restaurant buildings and improvements, and qualified retail improvements;
  • Enhanced charitable deduction for contributions of food inventory;
  • Temporary exclusion of 100% of gain on certain small business stock;
  • Basis adjustment to stock of S corporations making charitable contributions of property; and
  • Reduction in S corporation recognition period for built-in gains tax

Energy Tax Extenders
The following are some of the several energy credits and provisions that were extended through 2013:

  • Credit for energy-efficient improvements to existing homes;
  • Credit for alternative fuel vehicle refueling property;
  • Credit for two or three-wheeled plug-in electric vehicles;
  • Credits with respect to facilities producing energy from certain renewable resources;
  • Credit for energy-efficient new homes; and
  • Credit for energy-efficient appliances;

This is a very general summary of the provisions of the Act. Please contact the Herbein team for more information on changes that might impact you or your business.

Read our update on the American Taxpayer Relief Act of 2012 - Individual edition posting.

For additional relevant year-end information please visit our year-end planning page, where all useful updates are linked in one place.


For more information please contact the authors of this update, Barry D. Groebel and Mark R. Shellenberger.

Barry D. Groebel, CPA

Mark R. Shellenberger, CPA