A proposal from U.S. Rep. Tom Reed (R-NY) to prevent mortgage debt relief from counting as earned income on federal income tax returns was enacted into law at the end of 2015 as part of the Omnibus spending bill and tax extenders package.
“We care about those who are struggling to make ends meet,” Reed said. “No one, who has gone through the process of receiving mortgage debt relief, should lose their home due to a federal tax bill. It’s just not right to undercut their efforts to stay on their feet.
“This bill is a great way to protect the hard-working families throughout our region that are may have fallen on tough times. We stand with our friends and neighbors and this is one way we can do that.”
Debt that was forgiven in 2015 or will be forgiven in 2016 will be covered by the provision to provide relief for homeowners.
Reed also called for comprehensive tax reform this week, citing the positive impacts such a change would have on the economy.
“Americans deserve a fairer, simpler tax code,” Reed said. “Simplification will help our small businesses in particular, create the jobs of today and tomorrow and that’s something we can all support.”