A $4,000 Travel Tax Credit to 'Explore America'? It Could Happen
travel tax credit

A $4,000 Travel Tax Credit to ‘Explore America’? It Could Happen

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Hundreds of millions of Americans received stimulus checks this spring as part of the federal government’s financial aid in light of coronavirus. The next round of federal help could be music to travelers’ ears.

U.S. tourism industry groups are pushing for a tax credit towards domestic travel – and President Donald Trump has voiced his support for including the credit in the next stimulus package, according to Forbes. Just what shape that credit may take – and if Congress is interested in helping out travelers and the tourism industry at all – remains to be seen.

But the U.S. Travel Association has proposed the “Explore America” Tax Credit, allowing travelers to cover 50% of their eligible travel expenses within the U.S. for a total of up to $4,000 per household. What would make the cut for your tax credit? The travel association says “any expense over $50 that is incurred while traveling away from home in the U.S.,” including meals, lodging, recreation, transportation, entertainment, gasoline, and more.

Travel expenses through Dec. 31, 2021 would be eligible under the association’s proposal. That would give you plenty of time to use it up, if it eventually passes.
 

travel tax credit 

It’s a tax credit, so you wouldn’t get a $4,000 deposit in your account to hit the road. Instead, your household would be allowed to apply 50% of those eligible expenses (for up to $8,000) to your taxes as a credit.

This isn’t law yet – and it may never be. It’s still early in the process as federal officials start working out how to build another stimulus package amid a rocky economy. There’s no telling whether Congress will go for the idea or instead focus on providing another round of direct financial aid to Americans – or both.

It’s strikingly similar to a plan in Japan to drum up domestic travel – which was initially mistaken to be an international free-for-all to cover half your costs for a trip to Japan. In this case, the “Explore America” name says it all: It would only cover domestic travel costs within the U.S.

With airlines, hotels, tour operators, and more all suffering, this would be a novel way to kick start travel in the U.S.

“We are grateful to the president for hearing our call for a national effort to get Americans traveling again as the country shifts into the recovery phase,” U.S. Travel Association CEO Roger Dow said. “Measures to incent travel will not only give people a renewed appreciation for this great country in which we live, but they are an efficient and effective way to ignite a recovery and restore jobs in every corner of the nation.”

 

Bottom Line

This is no sure thing – but it sure is an exciting idea.

 

This story has been corrected to show the proposed idea is a tax credit – not a deduction.

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7 Responses

  • Can you clarify if this is a tax credit or a deduction? There’s a significant difference and the terms are intermingled here.

  • Hopefully this goes through. My family has been talking about traveling to see other family and our parents, who are getting up there in age, aren’t able to travel unless things are comfortable. This tax credit would solve our problem of being able to afford such a trip for them.

  • Wow, what a good idea. Lets spread the virus around some more.
    120,000 is not enough
    Maybe instead use the money for funeral expenses for the next 100,000.

  • I don’t really understand exactly what it means. Does it mean that we will get it back when we do taxes next year? Please someone explain in great detail because i’m seeing that we’re not gonna get this money but it’s a tax credit so therefore if we don’t have the money to go on vacation then why does it help us?

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