Tax deal could include child credit expansions and (maybe) non-itemizer charitable deductions

There are reports of discussions in Washington DC to make a deal focusing on improving the child tax credit and restoring three business breaks, and that negotiations continue on additional items, such as a version of the non-itemizer deduction, potentially as an amendment if the bill makes it to the House and Senate floors for votes.

A critical point for Oregon’s nonprofits is that Senator Wyden (Chair of Senate Finance) is working to get it done ahead of the start of tax-filing season on Jan. 29, and that historically he is a strong supporter of the non-itemizer deduction.

The emerging three-year, bi-partisan deal would put roughly $80 billion into play to ensure that more of the poorest families — who are traditionally excluded from the credit because they don’t owe any income tax — would qualify for at least some federal assistance. It would allow the lowest-income families to claim the credit for each child, the people said, when the current credit only allows those at the lowest end of the income spectrum to receive payments for one child. And it would also permit some recipients to submit the previous year’s tax return to the IRS to receive a larger credit.

New tax breaks for disaster victims will be included in a potential tax deal in Congress, a Republican tax writer said Thursday, and Democratic senators were pushing to include provisions for affordable housing as well. The bipartisan demand for add-ons underscores how the plan being developed by Senate Finance Chair Ron Wyden (D-Ore.) and House Ways and Means Chair Jason Smith (R-Mo.) goes beyond core provisions expanding the child credit and a trio of business breaks.

The other provisions are designed to win over colleagues skeptical of the package, but they also risk spurring even more demands from rank-and-file members for their own pet causes. That in turn threatens to balloon the cost of the plan, upping the pressure to find offsetting payfors. The expansion of the potential deal comes as the tax chairs continue to massage the still-unreleased plan behind closed doors.

You can read the full story here and here.