The CTC expansion would increase the maximum credit per child to $2,000 from $1,600 through 2025 while restoring business deductions for research and development costs, interest payments and capital investments.
The deal also has provisions on increasing the low-income housing tax credit and a carve-out to protect Taiwanese companies from double taxation following an effort by the U.S. to reshore segments of the high-end semiconductor industry, much of which is based there.
Additionally, the proposal boosts the amount in capital expenditures that small businesses can immediately write off to $1.29 million from $1 million, along with increasing the reporting threshold for subcontractor work to $1,000 from $600.
“American families will benefit from this bipartisan agreement that provides greater tax relief, strengthens Main Street businesses, boosts our competitiveness with China, and creates jobs,” House Ways and Means Committee Chair Jason Smith (R-Mo.) said in a Tuesday morning statement.
Senate Finance Committee Chair Ron Wyden (D-Ore.) said the proposal could help as many as 15 million children who are close to the poverty line and would increase the stock of low-income housing across the country.
Senate Majority Leader Chuck Schumer (D-N.Y.) touted the plan on the Senate floor Tuesday afternoon.
“I support this bipartisan tax framework,” he said. “I hope our Republican Senate colleagues are willing to work with us to keep this process going.”
What the final legislative vehicle for the tax deal could be, and whether it will make it into law before tax season starts on Jan. 29, remains to be seen.
The Hill’s Tobias Burns has more here on the agreement and how Congress plans to pay for it.
