Editors' Pick: Originally Published Friday, Dec. 18.

Today the House passed the second part of its year-end taxing and spending bill, setting the stage for Congress to clear up its last major legislative duty before going home for the holiday season.

The Omnibus Appropriations Act has been met with praise and objections from lawmakers on both sides of the aisle, its $1.067 trillion in spending drawing Republican ire packaged along with $622 billion in tax cuts over Democratic opposition. Lawmakers in the House of Representatives passed the tax cuts late on Wednesday night and passed the appropriations package today. Now the spending bill will head to the Senate where it’s expected to have broad support. Obama is expected to sign off on the bill once it reaches his desk.

Friday’s appropriation vote was split almost evenly between defense and non-defense spending, and the tax bill as passed Wednesday night will extend and enhance approximately 50 individual and corporate tax breaks.

Few taxpayers will notice a difference from the dramatically named “Protecting Americans From Tax Hikes Act of 2015,” as it primarily extends and makes permanent existing provisions of the code such as the $2,500 college credit, the Earned Income Tax Credit and several popular charitable deductions. Despite complaints by Democrats that these are budget-busting cuts without offsetting revenue, many provisions in the PATH Act are in fact permanent extensions of existing, temporary cuts that have been renewed repeatedly by lawmakers over the past several years.

Yet while much of this bill contains breaks that have shown up on taxpayers 1040’s before, individuals may notice some new provisions, including:

A deduction for teachers who spend their own money on books and supplies, up to $250 per year. Although small, this begins to address an issue that educators have long complained about, as tightening school budgets have increasingly relied on teachers to make up for shortfalls in their own classrooms.

A permanent extension of the state and local sales tax deduction. Filers who itemize can deduct state and local income taxes or, under a temporary deduction, their state and local sales taxes paid over the year (a benefit for citizens of the seven states that don’t have an income tax).

An increase to the Earned Income Tax Credit and a reduction to the so-called marriage penalty.

An extension of the $3,000 threshold for the Enhanced Child Credit, which had previously been set to return to $10,000. This credit allows a qualifying family to claim a 15% refund for all income above the threshold.

Greater protections for individuals against reckless tax preparers by increasing the penalty from 50 to 75% of whatever their client paid.

Slightly better subsidies for commuters, who can deduct up to $250 per month in qualifying mass transit expenses from their income and payroll taxes.

Continued relief for underwater borrowers. When homeowners have to sell their home for less than it was worth banks might sometimes forgive the remaining debt. The IRS typically considers any forgiven debt as taxable income, but in this case, a tax break for underwater homeowners has been extended for the next two years.



The bill also extends and expands a popular research credit for businesses, which will now be made permanent, as well as extending tax incentives for energy production and conservation.

Certain surprising sections made it into the final bill as well, such as a full exemption for all restitution to wrongfully incarcerated individuals and a new definition in the United States for hard cider. It is, according to Section 335, a wine with no more than 0.64 grams of carbon dioxide per hundred milliliters made from either apples or pears and with no other fruit product or flavoring at all.

As with any politically charged issue, however, the PATH Act is not just about cutting taxes. In this case, House Republicans have also taken it as an opportunity to launch an attack on the Affordable Care Act. The bill delays several of the taxes raised to pay for the 2009 legislation, such as the medical device tax and new taxes on high-priced employer plans, the so-called “Cadillac tax.”

Although these provisions as written are only one year moratoriums it’s quite possible that conservative legislators intend for these delays to achieve a rolling permanence, potentially undermining the Affordable Care Act’s revenue structure in the long term.

Summoning back up old demons, this bill also makes it a fireable offense for IRS employees to take official actions for political purposes. No word, however, on whether they’ll get to start answering taxpayers’ phone calls again.