Republicans will make the doubled child tax credit in their tax bill partly refundable against payroll taxes, Sen. Mike Lee, R-Utah, said Wednesday evening, meaning that the tax break will be available to many more low-income families.
The Senate-passed version of the tax bill would have increased the child tax credit from $1,000 to $2,000, but would have limited the benefit for lower-income people by not similarly increasing the portion that would be refundable. Thus taxpayers would get money back from the government even if they didn’t have income tax liability.
Lee said in a Wednesday evening Facebook Live event with constituents that in the final joint House-Senate bill being negotiated “a significant portion, we don’t yet know for sure how much of that, will be refundable up to the total amount of taxes paid, including payroll taxes.”
Lee and Sen. Marco Rubio, R-Fla., had sought to amend the Senate version of the tax bill to make the child tax credit refundable against payroll taxes, but the pair were rebuffed. Most Republicans voted against the measure, which would have been offset by setting the corporate tax rate at 20.94 percent rather than 20 percent.
A spokesman for Lee said that discussions over the credit were still ongoing.
Earlier in the day, President Trump hinted that the credit would be expanded in the final bill.
“Our plan expands the child tax credit for working families,” he said in a speech on the tax overhaul at the White House. “You'll hear the numbers very soon, but they're even larger than anticipated.”
In question, though, would be how Republican tax writers could extend the credit to more families without breaking through the $1.5 trillion tax cut limit they placed on the bill through budgetary rules.
Republicans said Wednesday that they had also added several other major revenue-losing provisions into the final bill, including lowering the top individual tax rate to 37 percent and repealing the corporate alternative minimum tax.