Bush, House Weigh In on Revised Child Tax Credit

What started out as a rather benign adjustment to the recent tax legislation - a change in the Child Tax Credit to make it a refundable credit instead of a credit against existing taxes so that more lower-income families would receive money from the government - has turned into a political controversy, pitting the House Republicans against members of the Senate who passed a version of the bill last week.

The Senate bill affects this summer's scheduled tax rebate by making the $1,000 Child Tax Credit refundable and the scheduled $400 rebate payable to families even if they didn't pay income taxes in 2002.

House Republicans are interested in passing a similar bill but only if they can attach the revised Child Tax Credit to legislation that would make the new $1,000 Child Tax Credit permanent. Current law requires that the Child Tax Credit be reduced to $700 in 2005.

The Senate version of the bill would cost the government $10 billion over the two years it covers. The House bill would cost $100 billion over the next 10 years.

The White House is urging passage of at least the Senate version of the bill. White House spokesman Ari Fleischer said President Bush is anxious to have this bill on his desk. "He wants to sign it," Mr. Fleischer said at a press briefing on Monday.

If either the House or Senate version of the bill becomes law, some changes to the previously posted rebate dates will occur. Depending on how the rebate to lower-income families will be disbursed, either the entire summer rebate program which was scheduled to launch on July 25 will be delayed a month, or the new rebates for lower-income families will be delayed until September.

Related story: Senate Bows to Pressure, Extends Child Care Credit to Low Income Families

You may like these other stories...

At long last, the Obama administration issued draft instructions along with revised draft tax forms that provide companies guidance on how to comply with the Affordable Care Act’s (ACA) employer mandate.The US Treasury...
Treasury Secretary Lew to speak on tax reform, inversionsDamian Paletta of the Wall Street Journal wrote on Friday that Treasury Secretary Jacob Lew is planning a September 8 speech about a controversial corporate strategy...
The IRS requires most freelancers and other self-employed individuals to use the cash method of accounting, under which income isn't counted until cash, a check, or an e-payment is received, and expenses aren't...

Already a member? log in here.

Upcoming CPE Webinars

Sep 9
In this session we'll discuss the types of technologies and their uses in a small accounting firm office.
Sep 10
Transfer your knowledge and experience to prepare your team for the challenges and opportunities of an accounting career.
Sep 11
This webcast will include discussions of commonly-applicable Clarified Auditing Standards for audits of non-public, non-governmental entities.
Sep 18
In this course, Amber Setter will shine the light on different types of leadership behavior- an integral part of everyone's career.