Congress nears $70 billion tax deal that includes breaks for children and business

WASHINGTON — Congressional leaders are closing in on a $70 billion bipartisan and bicameral deal that would expand the child tax credit and provide tax breaks for business through 2025, three sources with knowledge of the talks said.

The package, which is being negotiated by members of the Democratic-led Senate Finance Committee and the Republican-led House Ways and Means Committee, is split evenly between the Democrats’ main demand, enhancing the child tax credit, which drastically cut childhood poverty, and providing new tax incentives favored by business, which Republicans are seeking in exchange.

“It’s looking good,” Rep. Jason Smith, R-Mo., the chair of the tax-writing Ways and Means Committee, said about a potential deal.

Senate Finance Committee Chair Ron Wyden, D-Ore., said he has been pursuing the tax deal for 18 months and is aiming to complete it by Jan. 29.

“We’re homing in on a very specific target, which is to get this done in time for filing season,” he said. “And I’m going to pull out all the stops and stay at it every day.”

The emerging deal, which remains fluid, aims to provide targeted relief for needy families and multi-child families. It would boost refundable child tax credits and incrementally lift the $1,600 cap on refundable credits. It would also give tax filers the option to use previous years' incomes if that enables their access to larger benefits. Monthly child cash payments that were sent to families for six months in 2021, however, are not part of the talks.

The business breaks would revive some policies under the Trump tax cuts of 2017 that have since expired. They would allow full expensing for domestic research and development, restore the pre-2017 interest deduction, extend bonus