The compromise that President Barack Obama and Congress struck on Jan. 1, 2013, to avert drastic federal spending cuts and tax increases known as the fiscal cliff also included some smaller tax perks.
The Research & Development tax credit, which expired in 2011, was made retroactive for 2012 and extended through 2013. The fiscal cliff bill, formally known as H.R. 8, also extends the wind power production tax credit, which gives a tax break of 2.2 cents for every kilowatt-hour of energy produced by wind. It was set to expire at the end of 2012 and will now include projects that complete construction in 2013.
Obama wants both of these credits to become permanent, and the fiscal cliff deal falls short of that. But it keeps them alive a little longer. We rate this a Compromise.
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Tax credits extended under fiscal cliff deal
Our Sources
Text of H.R. 8 (fiscal cliff bill), Jan. 1, 2013
House Republican Conference, summary of H.R. 8, Jan. 1, 2013
Washington Post, "Wonkbook: Everything you need to know about the fiscal cliff deal," Jan. 1, 2013
The Hill, "Tech groups laud R&D tax credit extension in 'fiscal cliff' deal,” Jan. 2, 2013
Business Journal, "Expired R&D tax credit refreshed, extended,” Jan. 3, 2013
Forbes, "Wind Power Tax Credit Survives Fiscal Cliff Deal,” Jan. 2, 2013