(UnitedHeadlines.com) – As the tax deadline of April 15 approaches, many middle-class families are noticing a shocking increase in the amount of taxes owed.
Due to inflation, a family with three children that makes more than $42,000 will pay close to $950 more in federal income taxes compared to 2018, when the Tax Cuts and Jobs Act went into effect. Families with more than three children will see their taxes increase by $300 per child.
When the Tax Cuts and Jobs Act took effect in 2018, families with three children could deduct up to $6,000 from their tax bill. However, because of inflation, the actual value of the child tax credit is now offsetting a smaller portion of a family’s real tax liability. Unlike most of the tax code, the child tax credit was not tied to inflation and, therefore, does not increase when inflation rises.
While families will see the increase, adults with no children will see no increase in federal income tax as they do not claim the child tax credit.
Legislators are attempting to fix the problem with a proposal that would tie the child tax credit to inflation, which would raise the amount a family can claim by just over $300 per child. According to some legislators, the latest bipartisan proposal to tie the credit would help families keep pace with rising expenses. In February, the House passed a bill allowing the increase to begin with the 2023 tax year. However, as the tax deadline of April 15 approaches, the legislation remains stalled in the Senate.
The IRS issued a statement in February regarding the proposed legislation, stating that the IRS is “poised to move quickly to implement” the expansion of the child tax credit if Congress passes the legislation. The IRS will also automatically make adjustments for taxpayers who already filed taxes and are eligible for the changes.
Copyright 2024, UnitedHeadlines.com
