On Wednesday, the House of Representatives passed a $78 billion tax bill to bolster child tax credits for millions of low-income families and provide three tax breaks for businesses, sending the bipartisan bill to the Senate for consideration.
The House of Representatives voted overwhelmingly bipartisan 357-70 to pass the measure, known as the Tax Relief for American Families and Workers Act of 2024.
The passage of the bill, drafted by bipartisan lawmakers in both chambers, marks a rare bipartisan collaboration in this Congress.
This tax bill would expand the Child Tax Credit by gradually increasing the amount of tax credits available for refunds, increasing the maximum credit per child from $1,600 to $2,000 by 2025, adjusted for inflation in 2024 and 2025. The bill also provides a tax credit for affordable housing that Americans can afford to live in if they are subjected to a natural disaster, such as a wildfire or a train derailment like the one in Ohio.
The bill retains the threshold for families earning $2,500 to qualify for the refundable Child Tax Credit. According to estimates by the Center for Tax Policy, a nonpartisan agency, families benefiting from the changes in the Child Tax Credit will receive an average tax cut of $680 in the first year.
In addition, under the bill, the cap on the low-income housing tax credit will be increased by 12 by 20255% to lower the threshold for low-income housing tax credits for bond-financed buildings.
The bill also intends to reinstate three business relief that were eliminated in the Trump** tax cuts and jobs bill in 2017, including allowing businesses to deduct R&D costs annually instead of every five years. The prospect of the bill becoming law is uncertain, as it still needs to be considered by the Senate.
Senate Majority Leader Chuck Schumer said Wednesday that he supports the bill and is working with Senate Finance Committee Chairman Wyden to "figure out the best way forward."
But the bill did not receive unanimous support: conservative Republicans, progressive Democrats and some moderate New York Republicans opposed the bill. The Congressional Joint Committee on Taxation estimates that the bill will increase the national debt by $399 billion over a decade.
The "Employee Retention Credit" introduced during the epidemic in 2020 was later found by the Internal Revenue Service (IRS) to have some employers falsifying and inflating their claims, and the new bipartisan tax law will stop new filings, saving $77.1 billion, which can offset the additional costs of the new bill by $77.5 billion.