Child tax credit: Will taxpayers see more money in 2024? – The Hill

(NEXSTAR) – Some taxpayers could see big benefits in the form of expanded child tax credits if President Biden’s tax deal passes Congress, but the proposed legislation has hit a roadblock. .

In late January, the House of Representatives passed the bill, entitled the Tax Relief for American Families and Workers Act, by a bipartisan vote of 357-70. But all momentum stopped once it reached the Senate, where it remains stagnant even with about a month left until tax filing season.

The current child tax credit is $2,000 per child, but not all of it is refundable. If the bill passes, the amount of the credit available as a refund would increase in stages: $1,800 on a 2023 tax return, $1,900 on next year’s tax return, and $2,000 on a 2025 tax return. The amount will be increased to . The bill would also adjust the topline credit amount to temporarily increase in line with inflation.

The bill, authored by House Ways and Means Committee Chairman Jason Smith (R-Missouri) and Senate Finance Committee Chairman Ron Wyden (D-Ore.), also includes business deductions that were eliminated during the Trump administration. It is meant to be revived.

resistance in the senate

Despite broad bipartisan support in the House, passage in the Senate was not easy.

Some Senate Republicans who oppose the bill point to the bill’s “retroactive provision” that allows parents to use their previous year’s income to claim more credits, likening the refundable credits to welfare. .

Sen. Mike Crapo (R-Idaho), Ranking Member of the Senate Finance Committee, said, “Allowing an individual to receive a refundable credit if their annual income is zero, as allowed by the prior year income provision,” , a departure from the longstanding policies that bind CTC’s activities.” I have written In a statement.

Crapo said he hopes to reach “a mutually agreeable outcome” with the bill’s sponsors, but with each passing week calls for “many amendments” and “I.R.S. “There is growing concern about making changes for 2023 this far into tax filing season,” he added.

Some have criticized the bill’s funding, which comes from early repeal of notoriously fraudulent coronavirus-era tax cuts.

“How can fiscal conservatives defend using false savings to pay for more spending?” said Sen. Thom Tillis (R-North Carolina). Wall Street Journal editorial. “It’s like paying off your credit card balance with another credit card.”

Despite resistance from some in the Senate, which makes it more difficult to pass major legislation during an election year, some senators from both parties remain optimistic a deal will be reached. There are many people who do.

“I want to see something get done,” Montana Republican Sen. Steve Daines said Thursday. new york times. “I think we have a good chance of getting through it.”

Brian Gardner, chief Washington policy strategist at Stifel Investment Bank, told Nexstar in a statement that he believes the bill’s chances of passage are “slightly better than 50-50.”

“While Ranking Member Crapo would like to see some changes (and possibly increases), this bill has broad bipartisan support, making it more likely to pass,” Gardner said. “If the Finance Committee ends up amending the bill, the calendar will become the bill’s enemy, making it less likely to pass.”

Should I wait to file my taxes?

There’s still a chance that Congress could pass legislation to expand the child tax credit, but experts say people shouldn’t wait to pay their taxes in hopes of getting a bigger refund.

“If taxpayers are ready to file, they should move forward with filing,” Joshua Youngblood, senior tax advisor at Youngblood Group, told Nexstar.

If the bill passes, IRS Commissioner Danny Wuerffel assured eligible taxpayers that the IRS would be able to process tax credit changes retroactively.

“The bottom line is, if you need additional reimbursement, the service will be able to coordinate and process that,” Youngblood said. “This does not require an amended return.”