A bill that would expand the Child Tax Credit and the Low-Income Housing Tax Credit passed the U.S. House Ways and Means Committee by a 40-3 vote on Friday.
The bill would expand access to the Child Tax Credit with a phased increase to the refundable portion of the child tax credit for 2023, 2024, and 2025, would eliminate a penalty for larger families by ensuring the child tax credit phase-in is applied fairly to families with multiple children, and would create a one-year income “lookback” provision to create flexibility for taxpayers to use either current- or prior-year income to calculate the child tax credit in 2024 or 2025, similar to bipartisan action taken six times in the past 15 years.
The bill would also increase the supply of low-income housing by enhancing the Low-Income Housing Tax Credit with increased state allocations and a reduced tax-exempt bond financing requirement.
The Center on Budget and Policy Priorities estimates that the bill would benefit 16 million children in low-income families and “lift as many as 400,000 children above the poverty line” in its first year, with more even more set to benefit in 2025.
“These substantial benefits for low-income families are paid for by reductions in widely abused tax credits for businesses, making this bill a good deal for the American people,” said Eighth District Democrat Don Beyer, who voted in favor of the proposed legislation. “A major Child Tax Credit expansion would be a remarkable accomplishment amid a chaotic and historically unproductive House Republican majority. It is my hope that passing this bill now with an overwhelmingly bipartisan vote will send a message to the full House that these measures have strong support, and will ensure that they are a key component of future tax discussions in the 2025 tax cliff, and beyond.”
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Chris Graham
