10/18/22 Tax Breaks for Kids, Companies Are Suddenly Brewing in Congress

10/18/22 Tax Breaks for Kids, Companies Are Suddenly Brewing in Congress: Contents

Tax Breaks for Kids and Companies are Brewing in Congress

When Congress returns in a few weeks, Republicans and Democrats will be focusing on a compromise to extend tax breaks for both low-income children and corporations — which would hand wins to both parties before year’s end but after the critical midterm elections.

Any deal would resolve a series of tax issues that each party has tried to address. Republicans have warned about damage to US investment and innovation, while Democrats say they won’t vote for any business-tax incentives unless the child-tax credit is also addressed.

The GOP wants to extend an expansive tax break for research expenses, a writeoff for corporate-debt costs and a tax break letting companies deduct all their capital-expenditure costs in a single year.

Democrats aim to revive a more generous version of the child-tax credit, which was raised from $2,000 per child to as much as $3,600 in President Joe Biden’s American Rescue Plan in 2021. That version of the benefit, which was distributed via monthly payments rather than being included in a tax refund, expired at the end of last year.

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