NAFCU updates tax bill analysis with insight on HELOC treatment

NAFCU yesterday updated its analysis of the newly enacted Tax Cuts and Jobs Act (H.R. 1) in order to continue providing credit unions with additional information on how the changes will impact them, their employees and their members. While the credit union tax exemption remains intact – thanks to the advocacy efforts of NAFCU and credit unions – there are many other provisions of the tax code that are revised.

The association’s updated analysis is available online, but of note are further details on how home equity loans and lines of credit (HELOCs) are treated, and additional details on the tax treatment of certain executive compensation provisions.

The act places a limit on the deductibility of interest paid on some HELOCs that begin after Dec. 31, depending on the purpose of the loan. Although it does not alter distinctions between acquisition debt and other home equity debt, the act eliminates the deduction of home equity debt and limits acquisition debt to $750,000 – reduced from its current cap of $1 million.

 

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