House to Vote on Its Version of Child Credit Bill | AccountingWEB

House to Vote on Its Version of Child Credit Bill

Earlier this week the U.S. Senate passed a bill that would expand the recent revisions in the Child Tax Credit to make the credit refundable so that it includes more low-income families. Wednesday, the House Ways and Means Committee produced its version of a bill that incorporates the Senate provisions and more.

The House version of the bill, expected to be presented for a vote on Thursday, makes the $1,000 Child Tax Credit available to more low-income families by allowing families to claim a refund worth up to 15% of their income over $10,500. Families with income of less than $10,500 are not eligible for the credit.

Going beyond Senate provisions, the House bill makes the $1,000 Child Tax permanent until 2010. Under the Senate revision, the credit will drop back from $1,000 to $700 in 2006.

In addition, the House bill adjusts the phase-out of the Child Tax Credit for higher income taxpayers so that married couples filing a joint tax return do not lose their ability to claim the full tax credit until their income exceeds $150,000 instead of the current $110,000. The level at which the credit phases out completely depends on the number of children in the family.

Liberal groups are calling the House bill fiscally irresponsible and arguing that the House bill will add to the nation's deficits, thus handing a greater debt burden to future generations.

The House bill includes other provisions such as suspension of the tax-exempt status of designated terrorist organizations and tax cuts for members of the military and for families of astronauts who died in the space shuttle Columbia.

See House Passes Child Tax Credit; Moms and Toddlers Demonstrate

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