Yesterday, the Senate passed, on a 93-2 vote, “major tax legislation” that, among other provisions, “lowers the refundable threshold for the child tax credit,” and “provides more than $17 billion in renewable energy tax incentives.” The House could take up consideration of the bill today.
The tax bill, called the Renewable Energy and Job Creation Act of 2008, lowered the income floor for claiming a child tax credit from $10,000 to $8,500. According to an analysis by the Center for American Progress, “if [the bill] becomes law, nearly 3 million children will be newly eligible for the credit and 10.1 million will receive an increased monetary benefit.”
Last year, “an estimated 10.6 million children in low-income families were completely ineligible for the Child Tax Credit…and an additional 11 million low-income children received less than the full benefit amount—all while families making $75,000-$100,000 receive the greatest benefit.” Lowering the income threshold should help to address that problem, and “bring economic relief to working families, especially during this era of rising food and gas prices.”
Meanwhile, the renewable energy provisions in the bill allow taxpayers to “claim a credit of up to $7,500 for purchasing plug-in electric cars, and production credits are extended to wind, biomass and marine — waves and tide — facilities.” Also, the the investment tax credit for solar energy and the credit for residential solar property have both been extended to 2016.
The legislation also extends the Alternative Minimum Tax (AMT) patch, which prevents the AMT from affecting 20 million new people next year. According to the Associated Press, “the House plans to offer a competing version as early as Wednesday that raises more revenue by closing loopholes used by hedge fund managers and corporations doing business overseas.”