$4,000 Travel Tax Credit vs TRIP Law: what are the differences between both financial stimulus
The $4,000 Travel Tax Credit and TRIP Law are similar but different as one politician in Arizona writes up her own version of the travel tax credit for Americans.
America politicians are currently negotiating the next round of stimulus relief for struggling citizens during the coronavirus pandemic. A round of $1,200 stimulus checks when the crisis started was not enough to keep Americans going given the toll the coronavirus has had on the US economy and another round of relief is needed.
Democrats have passed the HEROES Act which would see another round of stimulus checks delivered into Americans' bank accounts but Republicans continue to fight back on that front. They want to introduce stimulus in the form of tax rebates so that the money they do have to spend goes straight back into the economy. They are also looking to help small businesses in an effort to revitalise the reeling economy.
There is a middle ground, however, between these two ideas. Donald Trump has said another stimulus check will be sent out and says it will be "very generous". Politicians continue to search for that middle ground with a number of ideas being thrown on the table. The latest of those ideas is the TRIP bill -- the American Tax Rebate and Incentive Program Act.
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.
“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 differences between the $4,000 Travel Tax Credit vs TRIP Law
McSally's TRIP law offers a tax credit of $4,000 per adult to take a vacation at least 50 miles away from home. For couples, it increases to $8,000 plus you get an additional $500 for each qualifying child. The bill 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.
It is similar to the Explore America Tax Credit, which has just been tossed around as an idea so far. The initial tax credit idea would allow you to claim back 50% of the expenses incurred while on vacation. These expenses, according to the US Travel Association, can include aspects of the trip such as ‘"meals, lodging, recreation, transportation, amusement or entertainment".
McSally's bill is more aggressive because the tax credit in the TRIP Act is on 100% of expenses. The TRIP bill Travel will also only cover expenses 50 miles or more from the principal residence of the filer meaning you have to actually take a trip. This and other smaller nuances have been written up by McSally to put into writing what was initially just an idea that hadn't truly taken shape.
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