February 1, 2022
The House Rules Committee on February 1st advanced to the chamber’s floor the Competes Act of 2022, which is legislation that largely addresses competitiveness/supply chain issues with China but it also includes a tax provision.
The bill makes permanent the health coverage tax credit and increases the amount of the qualified health insurance premiums covered by the credit from 72.5% to 80%. The increase in the credit would take effect after December 31, 2021.
Under current law, this credit expired on January 1, which means it can be used when filing tax returns for 2021. Congress must extend it to be used for the current year.
The Rules Committee has allowed 261 amendments to be voted on during the floor debate of the bill. The list does not include tax-related amendments but it does contain an amendment that would allow state-legal cannabis businesses to access the banking system and help improve public safety by reducing the amount of cash at these businesses.
Some of the 261 amendments could be voted on en bloc or withdrawn while the legislation is being debated on the House floor, according to the agreement set by the Rules Committee.
The House could take up the legislation as soon as February 2nd. No House Republican is expected to support its passage. No GOP support means that the bill can only lose four Democratic votes, and it would fail to pass if five House Democrats oppose it.
Assuming passage in the House, the legislation will go into negotiations with Senators, who passed the U.S. Innovation and Competitiveness Act (USICA) in May. In the upcoming negotiation, lawmakers will hash-out the differences between their respective bills to create a single piece of legislation that both chambers must approve before it can be enacted into law by President Joe Biden.
Currently, it is not clear if the health care tax provision will be in the final package. The House provision is not in the Senate bill. The tax measure would stand a better chance of being included in the final draft if it was in both the House and Senate bills.
Democratic lawmakers hope to complete congressional action on the agreed-upon bill by Memorial Day, if not sooner. Republican resistance to the bill will make it hard to meet this timetable.
Prior reporting on this bill is here.
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