This tax bill could help lift millions of families out of poverty. (iStock)
The House of Representatives recently $78 billion tax bill It would temporarily expand the child tax credit. The bill now heads to the Senate, where it has support from both Democrats and Republicans.
Currently, the tax credit is $2,000 per child, but it is not fully refundable. The new bill is increase the refund amount $1,800 for 2023 returns. This amount increases to $1,900 for a 2024 return and $2,000 for a 2025 return.
“Last night, I voted to pass a tax package that expands the Child Tax Credit for 79,000 children in Memphis and TN-9, lifting many of them out of poverty,” said Congressman Steve Cohen. Stated. press release. “This bill also increases the Low Income Housing Tax Credit, which will benefit many households in my district and help alleviate the affordable housing crisis nationwide. It would also restore research and development tax credits to encourage business innovation and real local job creation.” ”
If passed by the Senate, this tax bill would Initially, it will support the evacuation of an estimated 400,000 children. Lift out of poverty and provide financial support to 3 million low-income children and their families.
The increase in credit refund limits would move more than 500,000 children above the poverty line by 2025, and approximately 5 million families currently living below the poverty line would receive more financial support.
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IRS waives $1 billion in penalty taxes, 2024 tax season begins in January 29
Standard deduction adjusted for inflation
Other tax changes are planned this year, including an increase in the basic deduction to keep pace with inflation.
of The IRS recently announced For single and married taxpayers filing separately, the standard deduction increases by $750 to $14,600 in 2024.
For married couples filing jointly, the standard deduction increases by $1,500 in 2024 to $29,200. The standard deduction for the head of household will also increase by $1,100 for her in the 2024 tax year, making her $21,900.
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New IRS tax rules take effect in 2023 and could mean even higher salaries
Fewer vehicles will be included in the electric vehicle tax credit this year
The $7,500 electric vehicle credit for new and used EV purchases is limited to certain vehicles. Currently, only 13 of his vehicles are eligible for credit.
To reduce dependence on Chinese manufacturers, electric vehicles that use Chinese-made parts will no longer be eligible for tax credits. According to the I.R.S..
For new EV purchases, eligible vehicles will receive a full $7,500 credit. Used cars purchased before or during 2023 are eligible. up to $4,000. Car buyers must not exceed certain income limits and must use the car only for personal use.
Several Vehicles still eligible Tax credits include Model Y Tesla, R1T trucks, NV Jeep Wrangler 4xe, and Ford F-150 Lightning trucks.
“I’m expecting this [list] It increases over time.” Kate Whitefoot said, associate professor of engineering and public policy at Carnegie Mellon University. “That’s because it will take time for automakers to build the domestic battery and mineral supply chains needed to meet the tax credit requirements, which are still relatively new.”
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The number of electric vehicles eligible for the new electric vehicle tax credit decreases to 13.
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