House GOP leaders continue to push a $78 billion bipartisan tax package that would temporarily expand the child tax credit and restore a number of business tax benefits. But many hurdles remain, and whether it ultimately passes both chambers is in doubt.
Overall, the deal would reduce federal revenue by $399 million over 10 years.
Here are the details:
What the deal would do:
It would increase the maximum refundable credit for households who owe little or no income taxes. That would enable lower-income families to claim more of the credit.
Low-income families with more than one child would receive the same credit for each of their children, just as higher-income families already do.
Families would have the choice of using their earnings in the current year or prior year, in case their earnings were volatile.
The credit would be adjusted for inflation starting in 2024.
The provisions would be in effect for three tax years, from 2023 through 2025.
What the deal would not do:
Unlike the temporary child tax credit expansion in the 2021 American Rescue Plan Act, the current deal would not increase the size of the credit for many families to as much as $3,600, nor make the full credit available to low-income families regardless of earnings, nor distribute half of it on a monthly basis.
It would not change the minimum earnings threshold of $2,500 needed to begin to claim the credit.
It would not change the requirement that children must have Social Security numbers for their families to file for the credit.
What are the objections:
Some Republicans are concerned that the proposal would disincentivize work and that…
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