The House passed bipartisan legislation last month that would temporarily reform the Child Tax Credit (CTC), boost an affordable housing tax credit, and restore several business-friendly provisions. The provisions are mostly paid for by moving up the deadline for claiming the COVID-era Employee Retention Tax Credit (ERTC), which many have scrutinized in recent months following reports that a significant portion of claims are illegitimate. The bill cleared the House with broad bipartisan support but still faces challenges in the Senate. Sen. Mike Crapo (R-ID), the chamber’s top Republican tax writer, along with other key members of the GOP have expressed skepticism regarding the bill’s CTC and ERTC reforms, suggesting that the legislation could disincentivize work and that its price tag is too high. The Senate has remained focused on advancing a package of foreign aid over the past few weeks, so it is unclear whether the chamber will take up the tax bill when Senators return from recess later this month. Of note, the House-passed bill doesn’t boost charitable giving incentives, but Sens. James Lankford (R-OK) and Chris Coons (D-DE) who champion the Charitable Act have signaled they’ll push lawmakers to add an above-the-line charitable deduction available to all taxpayers to the package.

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