The tax extenders legislation, known as the Tax Relief for American Families and Workers Act, is currently stuck in the Senate as senators seek changes in provisions such as the expanded Child Tax Credit. The $78bn bill, which includes various tax relief measures, was passed by the House but has not yet been marked up by the Senate Finance Committee. Resistance from senior Republican senators like Idaho’s Mike Crapo and Iowa’s Chuck Grassley has contributed to the delay. The bill aims to increase deductions, provide disaster tax relief, and make improvements to tax credits. It also addresses the Child Tax Credit, indexing it to inflation and incrementally increasing the refundable portion. The IRS has advised taxpayers not to wait to file their tax returns, as any necessary adjustments will be made automatically if the bill is passed. The legislation also addresses the state and local tax deduction, known as the SALT cap, which has been a point of contention between Democrats and Republicans. A bill to increase the cap has been introduced but has not made progress. Analysis suggests that the benefits of the legislation would primarily go to high-income taxpayers.
