On November 9, the House Ways and Means Committee approved, 24-16, H.R. 1, the Tax Cut and Jobs Act, as amended, sponsored by Rep. Kevin Brady (R-TX). The committee is advancing the legislation as instructed under H. Con. Res. 71, the FY2018 Budget Resolution, which contained reconciliation instructions for tax reform (see The Source, 10/27/17).
According to the committee summary, the bill would increase the child tax credit from $1,000 to $1,600 per qualifying child and establish a $300 credit for non-child dependents. The refundable portion of the child tax credit would be indexed for inflation and would increase to match, but not exceed, the $1,600 base credit. In addition, the measure would establish a $300 family flexibility credit for taxpayers who are not children or non-child dependents. The bill would phase out these combined credits at $115,000 and $230,000 for single and joint filers, respectively (under current law the phase-out begins at $75,000 and $110,000 for single and joint filers, respectively).
The bill also would require individuals to provide a work-eligible Social Security number (SSN) in order to claim the Earned Income Tax Credit (EITC) and a SSN for the child to claim the full enhanced child tax credit.
Among other provisions, businesses that currently claim credits for child care expenses would not be allowed to do so after 2017 under H.R. 1.
Under current law, individuals who pay alimony receive an above-the-line deduction; such payments are included in the recipient’s income. Under the proposed law, the payments would no longer be deductible and no longer included in the recipient’s income.