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Ways and Means Committee Votes to Extend Tax Provisions

On May 15, the House Ways and Means Committee approved, 25-12, the Energy and Tax Extenders Act (H.R. 6049), a bill to provide tax incentives for renewable energy products and extend several tax provisions for another year after approving, by voice vote, a substitute amendment by Chair Charles Rangel (D-NY). The House passed similar legislation (H.R. 3996) on November 9 (see The Source, 11/9/07).

The measure would expand the eligibility for the refundable child tax credit. The child tax credit is refundable up to 15 percent of the taxpayer’s earned income above $12,050. H.R. 6049 would lower this threshold to $8,500, thus increasing the number of families eligible for the child tax credit.

The bill also would extend for one year the rule permitting servicemembers to include their combat pay when determining their eligibility for the Earned Income Tax Credit (EITC) and the “above-the-line” deduction for qualified education expenses for teachers who pay for school supplies using their own money.

The legislation would provide an additional $400 million for the Qualified Zone Academy Bonds program, which provides grants to state and local governments for school modernization, equipment purchases, and teacher training.

As amended, the bill extends until December 31, 2008, the $100-per-day excise tax on group health plans that impose limits on mental health benefits that are not imposed on medical and surgical benefits.

During consideration of the bill, the committee rejected an amendment by Rep. Kevin Brady (R-TX) to strike the section of the bill relating to attorney-advanced expenses and apply the funds ($1.6 billion) to lower the floor of the refundable child tax credit.

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