Reed Touts Benefits of Expanding Child Tax Credit & Low-Income Housing Tax Credit
Sen. Reed backs efforts to lift children out of poverty, increase financial stability for working families, & cut taxes for RIers
WASHINGTON, DC – After a bipartisan, bicameral group of lawmakers negotiated a $78 billion package that would revive and expand the child tax credit and temporarily restore various business tax provisions, U.S. Senator Jack Reed encouraged Congress to move forward with the legislation, known as the Tax Relief for American Families and Workers Act.
Reed says Congress must work together to strengthen the economy, reduce red tape, put extra money in families' pockets, and spur construction of new quality, affordable housing units.
“The American people want Congress to work together to strengthen our country and communities and provide tax relief to working families and small businesses. Expanding the child tax credit and enhancing the Low-Income Housing Tax Credit and other key tax cuts are big steps forward in would go a long way toward those efforts. This bipartisan plan would help uplift 16 million children, help millions of families afford the necessities of life, and build a stronger middle-class. It would invest in Main Street, help build more workforce housing and other types of housing that Rhode Islanders can afford, and spur economic growth,” said Reed. “This bill may not be perfect, but it is a good step forward for hardworking households and Congress should continue working together to support the well-being of children and families. I will continue advocating for legislation that truly reflects American values and will help every American care for their children and have a safe place to call home.”
The Tax Relief for American Families and Workers Act would:
Support working families with an enhanced Child Tax Credit: The proposal would expand the child tax credit tax break for qualifying families with children, help more of the lowest-income families receive a larger credit, and can be claimed even by families who do not normally file a return. Under current law, the maximum refundable child tax credit is for $1,600 per child. The legislation would increase that amount to $1,800 this year, to $1,900 the next year and to $2,000 for the 2025 tax season. It would also adjust the tax credit's limit in future years to account for inflation.
Enhance the Low-Income Housing Tax Credit: The bill would spur construction of more affordable housing units by enhancing the Low-Income Housing Tax Credit, a public-private partnership with a proven track record, with increased state allocations and a reduced tax-exempt bond financing requirement.
Expand innovation and competitiveness with pro-growth economic policies like research and development (R&D) expensing: This would enable businesses of all sizes to immediately deduct the cost of their U.S.-based R&D investments instead of over five years – encouraging American innovation and improving our competitive position versus China and the rest of the world.
Build up Main Street by cutting red tape and rebuild communities struck by disasters with tax relief: The bipartisan agreement would allow small businesses to increase the amount of investment that they can immediately write off to $1.29 million, an increase above the $1 million cap enacted in 2017.
The House Ways and Means Committee recently voted 40-3 to favorably report the Tax Relief for American Families and Workers Act. The next step is for the bill to be considered by the full U.S. House of Representatives. If the bill clears the House, it must then be approved by the full U.S. Senate, which requires a 60-vote threshold to pass legislation.