Child Tax Credit Passes House — Refundable Amount Increases to $2,000 by 2025 If It Passes Senate
The U.S. House of Representatives passed the Tax Relief for American Families and Workers Act on Wed., Jan. 31. If passed in the Senate, the act would expand the Child Tax Credit for American families and reinstate some business tax cuts.
Negotiations between Rep. Jason Smith (R-Mo.), chair of the House Ways and Means Committee, and Sen. Ron Wyden (D-Ore.), chair of the Senate Ways and Means Committee, got the bill passed by a bipartisan vote of 357-70, USA Today reported. The bill was passed under the “suspension” method, which requires two-thirds support instead of a simple majority.
“I am eager to get this bill passed by the Senate and signed into law,” Smith said in a statement. “Millions of working families and Main Street businesses are counting on Congress to get this done.”
If passed by the Senate and signed into law, this will be the largest non-emergency tax bill passed by Congress in nearly a decade.
Provisions of the Tax Relief for American Families and Workers Act
Currently, families are eligible for a maximum Child Tax Credit of $2,000, $1,600 of which is refundable, for each child under age 17 at the end of 2023. Families earning less than $2,500 don’t qualify, and eligibility for the credit phases out for individual filers earning $200,000 ($400,000 for those married filing jointly). Eligible families qualify even if they don’t owe any income taxes
If passed, the bill would raise the refundable portion of the Child Tax Credit to $1,800 per child in tax-year 2023, $1,900 per child in 2024 and $2,000 per child in 2025. The values would adjust for inflation in 2024 and 2025.
Other provisions of the bill include tax benefits for those impacted by natural disasters, extending tax breaks for businesses through 2025 and enhancing the low-income housing tax credit.
Hurdles in the Senate To Get the Bill Passed
The legislation faces obstacles in the Senate. Some progressive Democrats say the legislation does not go far enough to give tax breaks to families and gives undue tax breaks to corporations. On the other hand, ultra-conservative Republicans are concerned that the increased child tax would provided benefits to undocumented immigrants.
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This article originally appeared on GOBankingRates.com: Child Tax Credit Passes House — Refundable Amount Increases to $2,000 by 2025 If It Passes Senate
