New bipartisan proposal to enhance the Child Tax Credit: What to know

A new, bipartisan tax framework unveiled by lawmakers Tuesday would enhance the popular Child Tax Credit to benefit millions of American families.

The proposal, released by Democratic Sen. Ron Wyden and Republican Rep. Jason Smith, would boost the refundable portion of the credit people can claim, allow low-income families with multiple children to receive more of the benefit and adjust the credit for inflation.

«Fifteen million kids from low-income families will be better off as a result of this plan, and given today's miserable political climate, it's a big deal to have this opportunity to pass pro-family policy that helps so many kids get ahead,» Wyden, an Oregon Democrat, said in a statement.

The tax package also includes new low-income housing tax credits, disaster tax relief and tax benefits for Taiwan.

Smith, the chairman of the House Ways and Means Committee, called the proposal a «common-sense tax package that will strengthen Main Street businesses, rebuild communities, support American families, and boost our competitiveness with China.»

The legislation's fate in Congress, however, is unclear.

Lawmakers are already struggling to coalesce on spending measures to keep the government open and operating before Friday's partial shutdown deadline.

Also, notably absent from Tuesday's announcement of the tax agreement was Mike Crapo, the top Republican on the Senate Finance Committee, and Richard Neal, the top Democrat on the House Ways and Means Committee.

Wyden said it was his goal to pass the package before the start of tax season, which is Jan. 29.

The changes to the federal Child Tax Credit enacted in 2021 under the American Rescue Plan had a significant impact on families.

According to Census Bureau data, 3 million