A new bill introduced in the U.S. Senate today may allow Americans to get tax credits for domestic travel in an effort to jumpstart the country’s ailing travel industry. The bill, called the Hospitality and Commerce Job Recovery Act, was introduced by a bipartisan group of senators from both coasts of the U.S. and Illinois. It includes the travel tax credit as well as other relief measures for restaurants, hotels and event spaces. Travel and hospitality advocates are hopeful the bill will pass, bringing much-needed relief to hard hit industries. Here’s what you need to know.
How Much Would the Tax Credit Be?
The credit would allow people to deduct 50% of travel costs for domestic U.S. travel, up to $1500, for Americans earning less than $75,000 a year. Above the $75,000 threshold, the credit tapers off in increments of $2 for every $50 the person earns. Parents would also get $500 in tax credits to use toward travel expenses for their children.
What Expenses Would Be Allowed Under the Credit?
Expenses for any overnight, domestic travel more than 50 miles from home could count toward the tax credit. That includes gas, transportation, hotel costs, food, drinks, and entertainment. Only expenses over $25 could be counted, however. Of course, like any tax credit or deduction, people would need to keep receipts to prove their expenses in case they were ever audited.
What Counts as Domestic Travel?
Travel to or from any U.S. state or territory would be considered domestic for the purposes of the bill, including Puerto Rico. The mode of travel—whether flying, driving or taking a train—doesn’t matter. The purpose of travel also doesn’t matter; leisure travel and necessary trips both count.
What Else Does the Bill Include?
The bill also includes a variety of tax deductions and credits to help the hospitality and travel industries recover, including extending the employee retention tax credit and tax credits for restaurants and trade shows. It doesn’t include any direct funding, however.
We will keep you up-to-date as the bill moves through Congress on the Skip blog and app. If you’re preparing for summer travel, make sure you download our app so you can register for TSA Pre-check (you can do this right from the Skip app), and get your passport renewed with our passport concierge service.