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.
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.”
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.