How would you like to get a tax credit for driving around in your RV? How would you like being able to deduct your food/beverages, lodging, transportation and even entertainment?
Sounds like a sweet deal doesn’t it?
As I read it, it is not a tax deduction but an actual tax credit. It would be applied to reduce your total tax amount due but not below zero. It could be applied up to $4k per person or $8k per couple and $500 per dependent.
We need to write our senators and gather up those receipts!!!
July 1, 2020
Arizona Sen. Martha McSally is proposing a bill that would give those who spend money on travel-related expenses in the United States up to $4,000 in tax credits for the trip.
Monday, McSally introduced the bill, called the draft American Tax Rebate and Incentive Program Act or the “American TRIP Act.”
“The tourism and hospitality industries were among the hardest hit sectors across the country and their revival is critical to our economic recovery,” McSally said in a statement. “My legislation will help boost domestic travel and jump-start the comeback of our hotels, entertainment sectors, local tourism agencies . . . and encourage Americans to safely get out of their homes and discover or rediscover Arizona along with the rest of the amazing destinations our country has to offer, after a difficult several months stuck inside.”
The bill would provide for a tax credit of up to $8,000 for joint filers or up to $4,000 for individual filers, plus an additional $500 for dependent children. The bill would apply to travel for the three tax years of 2020, 2021 and 2022.
A tax credit means direct savings for the taxpayer, because it reduces the amount of federal tax owed. For instance, if a taxpayer owes $10,000 in federal tax, and that taxpayer has taken a trip and spent $4,000, then their tax bill becomes $6,000 when the credit is taken.
The bill would also grant $50 million to help destination marketing organizations promote travel and tourism in the United States.
President Donald Trump told travel industry leaders in May that he supports a proposal for a tax credit, “that Americans can use for domestic travel, including visits to restaurants.”
Here are some of the key details of McSally’s proposal:
Details of the America TRIP Act tax credit:
- All travel within the United States and its territories
- Travel, expenses, and final destination must be 50 miles or more from the principal residence of the filer
- Applies to trips taken between Dec. 31, 2019, and Jan. 1, 2022, meaning individuals could write off a vacation that they had taken at the start of 2020 before the pandemic shut down most travel.
- Food and beverages
- Live entertainment events — including sporting events
- Expenses related to attending a conference or business meeting
Tax Credit Amounts:
- Maximum of $4,000 per year for an individual filer (up to $12,000 total across 2020 — 2022)
- Maximum of $8,000 per year for joint filers (up to $24,000 total across 2020 — 2022)
- Maximum of $500 per year for each dependent child
Note that the amounts are the maximum amount a filer can claim per year. You cannot carry over the credits.
Those who own a vacation home can get the tax credit for the trip to the home and entertainment while there.
Trip Act – Sen. Martha McSally
However, as I read it, it is not a tax deduction but an actual tax credit. It would be applied to reduce your total tax amount due but not below zero. It could be applied up to $4k per person or $8k per couple and $500 per dependent. Lets write our senators and gather up those receipts.