An effort to expand child tax credits overcame the partisan paralysis of Congress in January before it came to a halt at the feet of Idaho Republican Sen. Mike Crapo where it seems likely to die.
Crapo — the top Republican on the Senate Finance Committee — helped craft the bill with committee chair Ron Wyden, D-Ore. However, the inclusion of provisions that allow out-of-work parents to cash in on the credit turned a “thoughtful starting point” into a dead-end for Crapo, with most Senate Republicans following his lead.
The next several days are seen as the final, and closing, window for the tax package to pass before tax season ends and the Senate’s attention is turned toward national security measures, foreign aid and election season.
House passes an expanded child tax credit
Just after the new year, the $78 billion Tax Relief for American Families and Workers Act passed the House with the kind of bipartisan margins rarely seen in Congress today, with a 357-70 vote in favor of the bill. Utah’s Republican delegation, Reps. Blake Moore, Celeste Maloy, John Curtis and Burgess Owens, all voted for the measure.
Building on the Tax Cuts and Jobs Act Donald Trump signed into law in 2017, the bill would temporarily increase the child tax credit, which is refundable for low-income families, multiplying it on a per-child basis, and adjust the credit amount for inflation by $100 in 2024 and 2025 when it is set to expire.
The bill would also reinstate a policy that allows companies to immediately claim tax deductions for research and development costs, and would increase the Low-Income Housing Tax Credit for state agencies tasked with building affordable homes.
But the bill has stalled in the Senate where Minority Leader Mitch McConnel, R-Ky., has deferred to Crapo on whether the chamber’s 49 Republicans will join Democrats to bring it to the floor for a vote. Crapo, a Brigham Young University graduate, is one of the highest-ranking Republicans in the Senate.
In a statement issued at the end of February, Crapo said his central criticism of the package was a provision that allowed families to use their prior-year income to calculate benefits for 2023, 2024 and 2025. This would allow unemployed parents to be eligible for child tax credits, undermining work requirements and transforming the credit “from primarily working family tax relief into a government subsidy,” Crapo said.
Wyden offered to remove the provision last month but Crapo was still unsatisfied with the deal, Punchbowl News reported, as he remained concerned about the increased refundability for those who don’t pay federal income taxes — which has been the main selling point for Democrats.