Recently we published an article entitled “Second Stimulus Payment – Will Trump Give Americans Another Check?” Today, as surging cases of Coronavirus are affecting half of the States, there is more support for a second stimulus bill. What might be of new interest is the prospect of a travel tax credit included into the bill. President Trump is calling it ‘Explore America.’ Explore America vacation credit could be a tax credit to stimulate domestic tourism. However, you have to spend money to get the credit.
The idea came to light during a roundtable discussion between Trump and restaurant executives in mid-May. Trump is quoted as saying: “Create an “Explore America” — that’s “Explore,” right? Explore America tax credit that Americans can use for domestic travel, including visits to restaurants. That’s a big deal.”
How Explore America Vacation Credit Works
A statement from U.S. Travel Association President and CEO Roger Dow, suggested this to be in the form of a tax credit worth up to 50 percent of travel costs up to $4,000 per person. Dow announced: “An ‘Explore America’ tax credit and campaign will do wonders to put America back on the path to prosperity.”
The mechanism to establish this tax credit is found in the newly sponsored bill from Republican Senator Martha McSally. The highlights of the measure are:
- Up to a $4,000 tax credit for individuals, consisting of 50% of qualifying travel expenses incurred in the United States.
- Joint filers would get up to an $8,000 credit
- Families could get $500 additionally per dependent child
In summary, for a family of four, that could result in as much as a $9,000 tax credit from a vacation which cost $17,000.
The bill is known as the American Tax Rebate and Incentive Program Act or simply the American TRIP Act.
Explore America Vacation Credit Through 2022
The latest measure would provide credits for tax years 2020, 2021 and 2022. That exceeds what the US Travel Association originally asked for. The USTA asked for these tax credits through 2021.
The tax credit would cover 50% of eligible travel and dining-related expenditures that Americans incur through 2022. In order to receive the tax credit, you must stay within the U.S. and its territories plus travel 50 or more miles from your home. A trip qualifying for the Explore America vacation credit must occur between Dec. 31, 2019, and Jan. 1, 2022. That’s right; it’s a retroactive tax credit for travel taken this year which qualifies.
Eligible expenses entitling a taxpayer to the credit could include the following:
- Car Rentals
- Domestic Airfare
- Theme Parks
The theme parks category is great news for Disney. The company recently delayed the reopening of its Disneyland, California Adventure theme parks, along with its hotel properties in Anaheim, California.
Vacation Homes Would Be Eligible Expenses
The Explore America vacation credit, American TRIP Act, or Tax Rebate and Incentive Program, even applies to people traveling to their vacation homes. In brief, as long as the property is not considered the permanent residence of the taxpayer- it qualifies! If it’s a road trip, the expenses of using your own personal vehicle would receive tax credits based on mileage.
Considering Domestic Travel?
The next several months may provide fantastic opportunities to travel domestically. PointMe contributors have penned some great articles on how you might find some great travel bargains, domestically.
Check out these:
ReOpenings – Caribbean Coronavirus Travel Restrictions by Country (Think US Virgin Islands and Puerto Rico)
Hawaii: We’ll keep you advised on Hawaii’s latest status, since Hawaii’s Governor proclaimed visitors not welcome – orders tourists into quarantine and recently extended that mandate. Hawaii is considering to set aside mandatory quarantine if a person arrives providing proof of a negative COVID-19 test result. Test results must be within 72 hours of arrival.
The TRIP Act is not a part of an actual second stimulus payment bill. It would, according to Trump, be complimentary. Any help towards a future vacation probably looks great to many frequent travelers. Knowing that the US government would be willing to split the bill with you on a vacation is even better!
Tourism has been the hardest hit sector of the economy with the many Coronavirus travel restrictions. The Explore America vacation credit in the form of a tax credit may stimulate the return of tourism. Ultimately, taxpayers will be footing the bill for these qualifying domestic travels. In short, if you don’t take advantage of the offering, you’re subsidizing someone else’s travels.
If you’re looking to book something in the future, contact Juicy Miles, the professional award booking and Mileage Run service. I am also an independent travel agent and a Hawaii and Disney specialist who can help you plan any travel!
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