Child tax credit: House passes bill to enhance child tax credit, revive tax breaks for biz

Child tax credit: The House approves a legislation to strengthen the child tax credit and reinstate tax incentives for businesses.

On an unusual Wednesday, the House passed a bipartisan $79 billion tax cut package with broad support. This package aims to improve the child tax credit for lower-income families and provide three tax breaks for businesses, marking a significant achievement for lawmakers on both sides of the political spectrum.

The bill’s fate becoming law remains uncertain as it awaits consideration in the Senate. Despite the uncertainty, the House, often grappling with challenges in passing consequential bills, sees this tax legislation as a potential breakthrough. The bill secured a vote of 357-70.

Speaker Mike Johnson, R-La., expressed his backing for the bill, addressing concerns raised by GOP lawmakers, particularly regarding the expanded child tax credit. Some were dissatisfied with the bill’s omission of addressing the $10,000 cap on property taxes or state and local taxes deductible on federal returns. Johnson committed to addressing the cap in a future bill, although no text is available, and the timeline is uncertain.

Click Here to Join Onn WhatsApp

Johnson emphasized the importance of the bill passing through the House Ways and Means Committee before a full House vote, highlighting it as an example of effective congressional work.

House Republicans aimed to reinstate full, immediate deductions for businesses investing in new equipment, machinery, and domestic research and development expenses. Democrats focused on enhancing the child tax credit, incrementally raising refundable amounts over the years. The bill also adjusts the topline credit amount to temporarily grow at the rate of inflation.

The child tax credit changes would result in an average tax cut of $680 in the first year for households benefiting from them, according to estimates. While Democrats sought to restore the more generous 2021 tax credit, many were willing to accept the compromises in the bill.

However, not all Democrats were satisfied, with some viewing the bill as providing insufficient relief for the poor and benefiting the wealthy. Meanwhile, critics among Republicans likened the expanded child tax credit to “welfare.” Despite these varied opinions, a significant majority from both parties voted in favor of the bill, with proponents hoping for similar support in the Senate.

The bill maintains a $2,500 income threshold for households to qualify for refundable child tax credit payments. Additionally, it enhances a tax credit for the construction or rehabilitation of rental housing for lower-income households, potentially adding 200,000 housing units nationwide. The bill also addresses tax issues for victims of certain natural disasters and the East Palestine, Ohio, train derailment.

The Story Speaker

Welcome to TheStorySpeaker, your go-to destination for the latest and most insightful news articles. Join our community of knowledge seekers and stay ahead in the fast-paced world of news. Don’t forget to show your support for independent journalism!