Possible 2023 Child Tax Credit Increase

[BulldogTom]

12 minutes ago, Randall said:

I thought if they got the full credit ($2000) as nonrefundable, just a deduction of their tax, this pending bill would not affect it.  Only if they got a refundable credit.

You are correct.   If there is no refundable portion of the credit, it will not be affected by the changes.   What is proposed is that the refundable portion will go up by $200 per child to $1,800.   So your lower income folks who get the refund on the credit will get more if they wait.   Or they can file now and get the difference later when IRS goes back through and fixes the refunds.

Tom
Longview, TX

[Lion EA]

59 minutes ago, BulldogTom said:

Also affects bonus depreciation for your business returns.  I think that will apply to rentals as well for new business property installed in 2023 (stoves, refrigerators, etc)

So, if you have any business returns or any individual returns with dependent children or rentals, you need to consider when to file.

Tom
Longview, TX

Schedules C. Anyone with depreciation, new in 2023 depreciable property. Right?

[Lee B]

The bill passed in the House   357 - 70.

News reports say that it's uncertain what will happen in the Senate?

[BulldogTom]

On 1/22/2024 at 9:06 AM, BulldogTom said:

The 5 year amortization of R&D costs is pushed out in that bill as well.   

Wonder if Apple and some of the other giant tech companies and drug companies are lobbying hard in an election year for these changes.   

Tom
Longview, TX

A quote from a Bloomberg article this morning on MSN:

"A coalition of 250 business groups including the US Chamber of Commerce, Business Roundtable and National Association of Manufacturers has lobbied hard for the legislation authored by Ways and Means Chairman Jason Smith and Senate Finance Chairman Ron Wyden. 

Boeing Co., General Motors Co., Deere & Co., Caterpillar Inc., Amazon.com Inc., Microsoft Corp. and Apple Inc. are among the companies that stand to benefit, according to Bloomberg Intelligence.

The measure would restore expired tax breaks allowing businesses to more quickly recoup the costs of domestic research and development, interest on business loans and investment in equipment."

If you want to know what Congress is going to do....follow the money.

Tom
Longview, TX

[Pacun]

On 1/31/2024 at 12:39 PM, kathyc2 said:

You are correct.  If they have enough tax liability to absorb the CTC, this bill will not effect them.  The inflation adjustment as written does not come into play for 2023. 

Neither will it affect a tax payer with one child that uses $1K to cover tax liability and 1K refundable. 

 

[Lee B]

According to news articles, this bill is stalled in the Senate and if it comes to a vote it will be late this month or early next month.

[mcb39]

We are not waiting around.  We still have clients who are waiting for their last year's refund, which is still being processed.  Also, we are still not able to speak with an IRS rep even in response to a Collection Letter.  I don't have the strength to walk away from clients who need me.  Credibility???

[BulldogTom]

Are you all waiting on the business returns or are you filing and then amend?  Bonus depreciation is what I am running into most.   I can't hold out forever, I need to earn a living as well and I don't get paid until the returns are done.

I am extending the one that has R&D costs.   

Tom
Longview, TX

[Lee B]

The Senate is on a two week break, so there's no progress to report.

Also, the bill requires 60 votes to bring to the floor for a vote.

According to news reports there aren't 60 votes to do that.

[DANRVAN]

On 2/21/2024 at 5:48 PM, BulldogTom said:

filing and then amend?  Bonus depreciation is what I am running into most. 

I discuss with clients and let them make the call in cases where Sect 179 does not fit or it can't be squeezed into 1.263(a) safe harbor.

Most decided not to wait for a ship that has not yet set sail, and potentially file amended returns.

[BulldogTom]

Bumping up.  Is this legislation even coming to a vote in the Senate?    Was it part of the spending package that was rushed through the house last night?

Tom
Longview, TX

[DANRVAN]

14 minutes ago, BulldogTom said:

Was it part of the spending package that was rushed through the house last night?

I have not seen any indication that it was.

[Lee B]

According to Forbes, there is no sign in the Senate of this bill coming to a vote.

[BulldogTom]

Bloomberg article today about the status of the bill.   Still very iffy to pass or even come to a vote.   

https://www.msn.com/en-us/news/politics/bipartisan-78-billion-tax-deal-hits-gop-roadblock-in-us-senate/ar-BB1l5LVE?ocid=hpmsn&cvid=4aec1985a28f47e68dda2a10d5257964&ei=41

You can search it on MSN if you don't want to click the link.

Tom
Longview, TX