The bipartisan House approved a significant package on Wednesday that would extend important company investment deductions and increase the child tax credit. By a vote of 357 to 70, lawmakers from both parties voted in favor of H.R. 7024, the $78 billion Tax Relief for American Families and Workers Act.
There are certain Senate difficulties for the measure. However, according to the White House, President Joe Biden is in favor of the proposal. In order to get this plan into law before the start of tax season, which usually starts at the end of January, lawmakers have been working quickly.
The lower house engaged in dealmaking before to the vote on Wednesday. In an attempt to protest GOP leaders' decision to exclude any adjustments to federal deductions for paid state and local taxes from the tax package, four Republicans from New York threatened to sabotage an unrelated procedural vote on Tuesday.
According to two individuals involved with the discussions who spoke to the Washington Examiner, House leadership responded by promising to vote on a second tax package that would provide relief for SALT deductions, which helped rally support for the main tax plan. There are not many further information available regarding the second agreement or what it may contain.
Significantly, the primary tax package increases the child tax credit by altering its generous per-child computation. Additionally, it would aid lower-income families by raising the maximum refundable amount per kid from $1,600 to $1,800 in tax year 2023, $1,900 in 2024, and $2,000 in 2025.
Advocates for the child tax credit have long pushed for this feature, which adjusts the benefit to inflation.
The bipartisan agreement extends the corporate tax break for R&D expenses, a policy that the GOP has championed and for which industry associations have been actively advocating. Companies had to amortize R&D spending when the break ended, which increased their tax burden.
Additionally, the agreement puts a temporary stop to bonus depreciation phaseout. This was a clause in the 2017 Trump tax cuts that let businesses to deduct some capital expenditures straight away rather than spreading them out over the asset's "useful life."
Uncertainty surrounds the potential modifications and how the bipartisan plan would fare in the Senate. Sen. Bill Cassidy (R-LA), for example, is pushing for the tax agreement to include modifications to a contentious $600 IRS reporting requirement.
There are certain Senate difficulties for the measure. However, according to the White House, President Joe Biden is in favor of the proposal. In order to get this plan into law before the start of tax season, which usually starts at the end of January, lawmakers have been working quickly.
The lower house engaged in dealmaking before to the vote on Wednesday. In an attempt to protest GOP leaders' decision to exclude any adjustments to federal deductions for paid state and local taxes from the tax package, four Republicans from New York threatened to sabotage an unrelated procedural vote on Tuesday.
According to two individuals involved with the discussions who spoke to the Washington Examiner, House leadership responded by promising to vote on a second tax package that would provide relief for SALT deductions, which helped rally support for the main tax plan. There are not many further information available regarding the second agreement or what it may contain.
Significantly, the primary tax package increases the child tax credit by altering its generous per-child computation. Additionally, it would aid lower-income families by raising the maximum refundable amount per kid from $1,600 to $1,800 in tax year 2023, $1,900 in 2024, and $2,000 in 2025.
Advocates for the child tax credit have long pushed for this feature, which adjusts the benefit to inflation.
The bipartisan agreement extends the corporate tax break for R&D expenses, a policy that the GOP has championed and for which industry associations have been actively advocating. Companies had to amortize R&D spending when the break ended, which increased their tax burden.
Additionally, the agreement puts a temporary stop to bonus depreciation phaseout. This was a clause in the 2017 Trump tax cuts that let businesses to deduct some capital expenditures straight away rather than spreading them out over the asset's "useful life."
Uncertainty surrounds the potential modifications and how the bipartisan plan would fare in the Senate. Sen. Bill Cassidy (R-LA), for example, is pushing for the tax agreement to include modifications to a contentious $600 IRS reporting requirement.
