Child tax credit gets extended, while higher education tax breaks receive approval(Read article summary)
The House Ways and Means Committee approved expanding the child tax credit and higher education tax breaks. In other tax news, H&R Block offers a map outlining state income tax requirement to help same-sex couples' IRS filings.
The House Ways and Means Committee approved an expansion of the child tax credit. A party-line vote approved changes to the Child Tax Credit. The proposal would index the credit to inflation and increase the phaseout range for joint filers to $150,000, twice the range for single filers. The effort would cost $114.9 billion over 10 years and is not paid for with budget offsets.
Ways & Means also approved higher education tax breaks. The Committee voted along party lines for an expansion and simplification of higher education tax breaks. Available to married couples with annual income under $180,000, it provides a higher education tax credit of $2,500, with up to $1,500 refundable. The proposal would add $96.5 billion over 10 years to the deficit.
Speaking of debt: A Brookings Institution study released this week notes that typical student loan borrowers aren’t any worse off than those in their parents’ generation. About 25 percent of the increase in student debt since 1989 comes from Americans pursuing more education, especially graduate degrees. Average lifetime incomes of college graduates have more than kept pace with increases in student debt load. And student loan borrowers’ monthly payment burden has stayed about the same over the past two decades.
Surprise: Less money and more work weakens IRS service and enforcement. The Center on Budget and Policy Priorities confirms that as a result of budget cuts, the IRS has reduced its workforce, investments in employee training, and upgrades to information technology systems. But, it’s also taken on additional responsibilities under the Affordable Care Act and the Foreign Account Tax Compliance Act. Doing more with less is an IRS reality, but it’s hard to imagine that it’s a sustainable one.
On the Anniversary of DOMA’s Repeal: The Tax Institute at H&R Block offers a map of the patchwork of state income tax requirements since the repeal of the Defense of Marriage Act. TPC’s Bob Williams explored same-sex couples’ IRS filing complexities here. The US Supreme Court declared one year ago today that same-sex couples married in states where it is legal must receive the same federal health, tax, Social Security and other benefits that heterosexual couples receive.