Pease Limitation |
Suspended |
New formula reduces itemized deductions by 2 / 37 of the lesser of deductions or income above the 37 % bracket threshold |
High-income taxpayers may see reduced itemized deductions |
Charitable Deduction Floor |
No floor |
Only contributions exceeding 0.5 % of AGI are deductible when itemizing deductions, with carryforward rules |
Small charitable contributions may not be deductible |
Child and Dependent Care Credit |
Percentage phased down from 35 % to 20 % as income increased |
Percentage is 50 %, phased down to 35 % at $ 15,000 AGI, then to 20 % at $ 75,000 AGI($ 150,000 joint) |
Larger credit for many families, especially lower and middle income |
Increase in Dependent Care Assistance Program Limit |
Exclusion limit was $ 5,000($ 2,500 MFS). |
Increased to $ 7,500($ 3,750 MFS). |
Increases exclusion of employer-provided dependent care assistance from income, may help working families better afford care expenses. |
Enhancement of Adoption Credit |
Adoption credit was nonrefundable. |
Up to $ 5,000 of the adoption credit is refundable. |
More adoptive families, especially those with low or no tax liability, can benefit from the adoption credit |