House Panel Advances Tax Bill With 100% Bonus Depreciation

Child Tax Credit

The bill increases the maximum refundable amount per child to $1,800 in tax year 2023, $1,900 in tax year 2024 and $2,000 in tax year 2025. The $2,000 value of the child tax credit would be adjusted for inflation in tax years 2024 and 2025, rounded down to the nearest $100.

Smith said the provision “will ensure that parents can finally catch a break by building on the current child tax credit that supports families and rewards work.”

The new changes to the Child Tax Credit “would increase the amount that can be received as a refund and inflation adjust the maximum among other changes to the credit that would all last through 2025,” York said.

Rep. Richard Neal, D-Mass., stated during the Friday markup that “while this bill is a start towards the future America’s children deserve, more could’ve been done. Republicans are once again letting politics get in the way of good policy for America’s working families by refusing to expand the Child Tax Credit to include our country’s poorest children. If Democrats had our way, we’d have gone further. We know that when you grow the middle class, you grow the economy.”

Democrats wanted to revive the now-expired expansion of the Child Tax Credit from 2021 under the American Rescue Plan, which provided eligible families with up to $300 per month for each child under the age of 6, up to $3,600 a year per child.

The Center on Budget and Policy Priorities explains that the expansion would be in effect for three years, and would affect 16 million children.

“While modest in size, the proposal would have a significant impact,” the Center said.

In the first year, more than 80% “of the roughly 19 million children under 17 in families with low incomes who don’t now get the full credit would benefit — about 16 million children. This includes nearly 3 million children under age 3,” the Center reported.

Will the Tax Bill Become Law?

Jeff Bush of The Washington Update told ThinkAdvisor Friday that the legislation “still has a few hurdles to cross in order to pass. Detractors on both sides of the aisle suggest the effort doesn’t go far enough or complain it goes too far.”

Also, “will it be done in time to get attached to the budget resolution or will they try and bring it up as a stand alone bill?” Bush said, adding that the latter route was ”a much harder path to passage.”

That said, Bush believes “it will pass and in time to be retroactive. There are enough needed clean-up provisions in it to carry a majority of both chambers, and both parties have provisions they want to tout on the campaign trail.”