In a significant political stride, senior members of Congress announced a bipartisan agreement on Tuesday. The expansive deal aims to increase the child tax credit and introduce a series of tax breaks for businesses. Republicans and Democrats have collaborated on a groundbreaking $78 billion tax agreement.
Chair of the House Ways and Means, Jason Smith (R-Mo), and Chair of the Senate Finance, Ron Wyden (D-Ore), have been at the helm of this ingenuity. The tremendous feat signifies months of dialogue and collaboration between distinct parties in Congress. The agreement is not yet a sealed deal; it must now plunge into the legislation process, followed by the attainment of enough votes to surpass the House led by Republicans and the Senate led by Democrats.
What's in it for American Families and Businesses?
Chair Jason Smith exuberantly noted the powerful impact of this agreement on American families. He says, "American families will benefit from this bipartisan agreement that provides greater tax relief, strengthens Main Street businesses, boosts our competitiveness with China, and creates jobs."
The enhanced refundable child tax credits mark relief for families. The design is to aid families wrestling with financial troubles, especially those with numerous children. A noteworthy change in the agreement is lifting the $1,600 refundable limit of the tax credit to make it adjustable for inflation.
Can This Move to Reduce Child Poverty in America?
Senator Wyden passionately expressed relief over the opportunity to pass such a politically charged yet pro-family policy. He stressed, "15 million kids from low-income families will benefit from this plan." An independent analysis by the liberal-leaning Center on Budget and Policy Priorities predicts that an impressive 16 million kids from low-income families will benefit from the new child tax credit policy. The entity claims, "The expansion would meaningfully reduce child poverty."
Democrats have been rallying for a more considerable child tax credit, particularly after an earlier version passed for less than a year, which expired and led to a decline and subsequent rise in child poverty. It's understood that the new agreement will offer more minor benefits than those under the American Rescue Plan's monthly payments.
What Does This Mean for Businesses?
This wave of change is targeting not only families but businesses as well. The tax deal seeks to revive specific expired components of the 2017 Trump tax cuts for businesses. This arsenal of benefits includes expensing for research and experimental costs, restoring an erstwhile interest deduction, expanding small business expensing, and extending bonus depreciation.
Looking Ahead to The Tax Filing Season
As we pivot towards the commencement of the tax filing season on January 29, the potential passage of this deal outlines a promising landscape for families and businesses. The future involves a series of balancing acts for Congress, including averting a government shutdown by the end of the week and completing its funding procedure by March.
Senator Wyden articulated his resolute intention to see this deal passed in due time for the upcoming tax filing season. The accomplishment of this accord will stand as a testament to effective legislating on politically sensitive matters by a Congress that's historically known to be less productive.
Need for Legal Assistance Received a Boost, Too
As these tax laws change and become more complex, the need for local lawyers to interpret and leverage these new tax laws has never been greater! Experienced attorneys can assist families and businesses looking to navigate these tax changes. Seek legal help today to understand the implications of these changes on your upcoming tax files. Don't wait to get the most out of this new law. Act now!
