Could child tax credit be expanded in 2024?

(NEXSTAR) – American parents would be some of the primary beneficiaries if a bipartisan bill announced Tuesday becomes law.

The roughly $78 billion in tax cuts would also go towards expanding the child tax credit and tax credits for businesses, but the path to passage could potentially be tougher.

The announcement was made by Sen. Ron Wyden (D-Ore.), Chairman of the Key Tax Policy Committee and Chairman of the Senate Finance Committee, and Rep. Jason Smith (R-Missouri), Chairman of the House Ways and Means Committee. I was disappointed. Committee.

What are the benefits?

The current child tax credit is $2,000, but only just over 75% of it, $1,600, is refunded at tax time.

Refundable tax credits are paid in cash even after your tax liability is reduced to zero, but non-refundable tax credits can only be used to pay your tax liability and any remaining tax credits are forfeited.

Under the proposed bill, the child tax credit would cap the refundable child tax credit at $1,800 on a 2023 tax return, $1,900 on next year's tax return, and $2,000 on a 2025 tax return. will increase to

According to , as long as you have a child with a valid Social Security number for employment in the United States, you can claim the Child Tax Credit. I.R.S.. When filing taxes for 2023, eligible dependents must:

• Be under 17 years old at the end of the year
• Be your son, daughter, stepchild, eligible foster child, brother, sister, brother-in-law, sister-in-law, half-brother, half-sister, or a descendant of any of the foregoing (such as a grandchild, niece, nephew, etc.);
• Must not exceed half of one's own financial support throughout the year
• have lived together for more than half a year
• be properly declared as a dependent on the tax return;
• Not filing a joint return with your spouse in the tax year or Submit only to claim a refund of income taxes withheld or estimated tax payments.
• May be a U.S. citizen, U.S. citizen, or U.S. resident alien

The child tax credit also has an income cap, so parents with incomes above $200,000 ($400,000 if filing jointly) will not be eligible for the full amount of the child tax credit in 2023; may receive Partial credit.

The bill would primarily benefit low-income households.

“16 million children from low-income families will be better off as a result of this plan. Given today's dire political climate, pro-family policies that will help so many children advance It is a great deal to have the opportunity to pass this,” Wyden said in a statement.

During the COVID-19 pandemic, the American Rescue Plan increases the child tax credit from $2,000 to $3,000 for children 6 and older and from $2,000 to $3,600 for children under 6. did. Lawmakers approved the expansion of benefits, which came with special allowances. Child poverty will be significantly reduced in 2021expires at the end of the year.

In addition to parents, business owners stand to benefit from the new bill, which allows companies of all sizes to deduct research and development costs immediately rather than over five years. It will also allow businesses to fully deduct purchases of equipment, machinery and technology. The bill also provides more flexibility in determining how much borrowings can be deducted.

The deal would be funded by an early end to a coronavirus-era program that gave companies tax breaks to keep employees on payroll.

Will there be a tax cut this year?

Wyden said his goal is to get the bill approved in time so businesses and families can benefit during the upcoming filing season.

The Internal Revenue Service will begin accepting and processing tax returns on January 29, so lawmakers are aiming to pass the bill as soon as possible.

Lawmakers are already racing to complete a spending bill, considering bills focused on aid to Israel and Ukraine and stemming the flow of migrants entering the U.S.-Mexico border. , this goal may prove difficult to achieve.

One option would be for House and Senate leaders to attach this bill to one of their top legislative priorities.

The Associated Press contributed to this report.