House Ways and Means Committee Democrats on Monday announced that their tax-writing committee will consider several legislative proposals that will eventually be included in a reconciliation bill, commonly known at the “rescue plan,” that President Joe Biden has called on Congress to approve.
It is important to note that the provisions mentioned below are not the final product that will come from the tax-writing committee. The entire Ways and Means Committee will begin vetting these proposals on Wednesday, and changes to the legislation could occur. That vetting process is expected to last until Friday.
Below are some of the proposals that the Committee will debate later this week:
- A $1,400 refundable tax credit for each family member, which shall be paid out in advance payments. The credit phases out between $75,000 and $100,00 of adjusted gross income ($112,500 and $150,000 for head of household filers and $150,000 and $200,000 for joint filers) based on information on 2019 or 2020 tax returns.
- Extending the Employee Retention Credit from July 1, 2021, to January 1, 2022.
- Extending temporary federal unemployment and benefits through August 29, 2021, and increasing the weekly enhanced benefit from $300 to $400.
- Expanding the Child Tax Credit to $3,000 per child 17 years old and under ($3,600 for children under 6) and makes it fully refundable and advanceable.
- Expanding the Child and Dependent Tax Credit to allow families to claim up to half of their childcare expenses.
- Enhancing the Earned Income Tax Credit for workers without children by nearly tripling the maximum credit and extending eligibility.
- Reducing health care premiums for low- and middle-income families by increasing the Affordable Care Act’s (ACA) premium tax credits for 2021 and 2022.
- Excluding amounts received from the Administrator of the Small Business Administration in the form of a Restaurant Revitalization Grant from gross income.
- Stabilizing the pensions for workers who participate in multiemployer plans that are rapidly approaching insolvency.
- Providing aid to nursing homes.
- On the international front, the legislation repeals the election for US affiliated groups to allocate interest expense on a worldwide basis.
The House Ways and Means Committee is just one of twelve House committees that are vetting proposals for the $1.9 trillion rescue bill.
All House committees are expected to complete vetting their bills by February 16, 2021. After that is process is complete, the House Budget Committee will combine all the bills into one piece of legislation that House Democratic leaders hope to vote on the week of February 22, 2021. Passage is expected.
At that point, the legislation travels to the Senate. Passage is also expected in the Senate.
The goal is to have the entire legislation approved by Congress and signed into law by mid-March so that unemployment benefits, like the enhanced $300 payment, benefits to gig workers, and the extension of coverage, which are all currently set to expire on March 14, 2021, are extended before they perish.