The tax package would double the per-child tax credit from $1,000 to $2,000.
In a White House speech, Trump said the Internal Revenue Service had advised that if he signs the bill into law before Christmas, the tax cuts would take effect in February.
Now, according to a report published Wednesday afternoon by Bloomberg, “a Republican familiar with the process” said the credit has been retained in the “reconciliation bill” that blends the two versions. They would like to reach an agreement by Friday, however, as they want both the House and Senate to vote on final legislation next week. The individual tax rates in the Senate bill would have expired after 10 years. Numerous corporate tax cuts would be locked in permanently, while most of the tax cuts for households and families were created to expire after 2025.
The final bill reduces the corporate tax rate to 21%.
That’s a bigger change than was contemplated by either the House or the Senate, and would help high-income residents in blue states like MA offset the losses they’ll experience with the narrowing of the deduction for state and local taxes.
But however the sausage was made, it appears that the US income-tax credit for purchase of a plug-in electric vehicle will not be killed after all. Currently, the credit is only partially refundable, meaning if it pushes a family’s tax bill beneath zero, they can’t necessarily get the full value of the credit as cash. That change is aimed at Sen.
The latest news on the GOP tax bill is that, in order to secure the vote of Senator Marco Rubio, Republican leaders have agreed to expand the child tax credit – but only by a fraction of the amount that Rubio initially demanded.
Owners of pass-through businesses will be allowed to deduct up to 20 percent of their profits, reducing their effective tax rate to no more than 29.6 percent. The Senate version did neither.
STATE AND LOCAL TAX (SALT): Both the House and Senate had proposed scaling back the popular individual deduction for state and local tax payments by limiting it to property-tax payments and capping that at $10,000.
The additional revenue is needed because Republicans are seeking to lower the top tax rate paid by wealthiest Americans, ratchet back proposed curbs on the deductions of state and local taxes, and scale back proposed tax rules for investment income. It’s unclear whether that figure is the same for joint and individual filers. The exemption will double to $11.2 million in 2018, and then rise with inflation after that. They also agreed to let homeowners deduct interest on the first $750,000 of a new mortgage, down from the current limit of $1 million.
In addition, the final bill will keep the adoption tax credit unchanged. USA corporations have been seeking a large tax cut like this for many years. That prevents nonprofit organizations from donating directly to political campaigns, and the House and Senate versions called for repealing it. Critics had argued that would allow nonprofits to become de facto tax-exempt political organizations.
Negotiators have removed several controversial provisions from the tax bill, including one that would have eliminated the deduction for interest on student loans and another deduction for medical expenses, said two congressional aides.
A potential stumbling block for the bill was removed earlier Friday when Sen.
Two other Republican senators remained undecided: Jeff Flake of Arizona and Susan Collins of ME – with each weighing different concerns. Republicans control 52 Senate seats and need 50 votes to pass the tax bill, as Vice President Mike Pence could be called on to break a tie.
Congressional Republicans on Friday unveiled the final version of their dramatic USA tax overhaul – debt-financed cuts for businesses, the wealthy and some middle-class Americans – and picked up crucial support from two wavering senators ahead of planned votes by lawmakers early next week.
“This bill is far from flawless, and left to my own accord, we would have reached bipartisan consensus on legislation that avoided any chance of adding to the deficit”, Corker said in a statement Friday.