WASHINGTON – The House passed a sweeping, bipartisan tax bill Wednesday that would expand the child tax credit for American families and reinstate some tax cuts for businesses.
The bill, negotiated between Rep. Jason Smith, R-Mo., chair of the House Ways and Means Committee, and Sen. Ron Wyden, D-Ore., chair of the Senate Ways and Means Committee, cleared the House by a bipartisan vote of 357-70.
The widespread support in the House was critical for the legislation because Republicans fast-tracked it under a tactic known as "suspension." Any bill that passes under suspension requires two-thirds support, as opposed to a simple majority. That means the tax proposal needed significant bipartisan backing in the Republican-controlled House.
Still, the a roughly $79 billion package faces a steep climb in the Senate, where Republicans are demanding the bill clear additional hurdles.
“There are issues that need to be fixed,” said Sen. Mike Crapo, R-Idaho, the leading Republican on the Senate Finance Committee that handles tax legislation.
Here's what you need to know about the legislation facing major challenges in the Senate – and what it could mean for parents, business owners and others across the country.
How would the deal impact me?
Though the tax legislation passed Wednesday would not rise to the level of the boosted pandemic-era child tax credit, the bill would raise the refundable portion to $1,800 per child in 2023, $1,900 per child in 2024 and $2,000 per child in 2025. It would also adjust the value for inflation in 2024 and 2025.
But the legislation extends beyond parents. It would also create tax benefits for people impacted by natural disasters, and it would strengthen the low-income housing tax credit. The bill is also set up to extend tax breaks for businesses through 2025 and implement benefits to support trade with Taiwan.
The tax breaks in the agreement would be paid for by eliminating the employee retention tax credit. That was a pandemic-era provision to help businesses keep employees on payroll, but has since been found to be rife with fraud.
Which lawmakers are against the bill?
Ultraconservative lawmakers strongly opposed the bill over the expanded child tax credit. Those Republicans claimed the child tax credit would have been doled out to undocumented immigrants.
The child tax credit, however, would not provide any new benefits for undocumented immigrants and would only provide a boost in existing benefits for families already receiving the credits. Only children with social security numbers can benefit from the bill.