| Signed | December 18, 2015, by President Barack Obama, as part of the year-end spending bill |
| Public law | 114-113, Division Q |
| In one sentence | A bipartisan deal that stopped the annual ritual of letting popular tax breaks expire and reviving them retroactively. |
| Still with us | All of it — several items with larger amounts set by later laws |
Why it happened
For about ten years Congress had let dozens of popular provisions — the research credit, the higher section 179 limit, the sales tax deduction, the teacher deduction, the IRA charitable rollover — expire every December 31 and then revived them, retroactively, in a last-minute bill the following year. Businesses could not plan a purchase and preparers could not finish a return. In December 2015 a Republican Congress and the Obama administration agreed to make the most-used ones permanent and attach the deal to the spending bill that kept the government open.
What it did
- Section 179 made permanent at $500,000, indexed, instead of falling back to $25,000. The 2017 law raised it to $1 million and the 2025 law to $2.5 million, but the PATH Act is what ended the uncertainty.
- The research credit made permanent, and opened to small businesses: usable against the AMT, and for start-ups against payroll tax.
- The American Opportunity Credit — $2,500 a year for four years of college — made permanent instead of reverting to the smaller Hope credit.
- The child tax credit’s refundability and the earned income credit expansions from 2009 made permanent.
- Qualified charitable distributions from IRAs for people 70½ and older made permanent — now the standard way a retiree who does not itemize gives to charity. See RMDs and QCDs.
- The state and local sales tax deduction as an alternative to income tax, and the teacher expense deduction, indexed, made permanent.
- W-2s and 1099s due to the government January 31, the same day as the copies to workers, so the IRS can match wages before paying refunds — and a rule that refunds on returns claiming the earned income credit or additional child credit cannot go out before February 15.
- From a companion law the same year: partnership returns moved to March 15 and C corporation returns to April 15, so K-1s reach partners before their own deadline.
What it meant
A contractor buying a $60,000 truck or a dentist buying $200,000 of equipment could count on writing it off in the year of purchase, without waiting to see whether Congress would revive section 179 in December. Early-season filers claiming the earned income credit lost a cushion: refunds no longer arrive before late February. And the January 31 deadline is the reason every small employer’s January now has a hard stop.