Tax Breaks For Child Care Costs
A bipartisan tax bill for child care. Senators Tim Kaine (D-VA) and Katie Britt (R-AL) have introduced the Child Care Availability and Affordability Act. The bill would increase the size of the Child and Dependent Care Tax Credit, make it refundable, and boost the Dependent Care Assistance Program. The bill would also increase and expand the Employer-Provided Child Care Tax Credit available to businesses.
Speaking of child care costs… TPC’s Margot Crandall-Hollick considers the tax bills of families with children and without. Families with children often pay less in taxes than their childless peers at the same income level. But some of those benefits, like the child tax credit (CTC), are unavailable to many families in need. Policymakers could expand the CTC or simplify child tax benefits so it’s easier for families to apply for and receive them.
Congress can maintain IRS rulemaking authority without Chevron. Reuven Avi-Yonah of the University of Michigan and TPC’s Steve Rosenthal examine the US Supreme Court’s Loper Bright decision, which overruled the Chevron doctrine. Courts are no longer required to defer to agencies for statute interpretations. But Reuven and Steve explain how Congress can maintain an agency’s power—like that of the IRS—to interpret statutes.
Some cannabis businesses are still hopeful for protective refund claims. TaxNotes reports (paywall) on legal advice shared with the industry. Business deductions for Schedule I and Schedule II drugs are not legal, but marijuana may soon be reclassified as a Schedule III drug, based on a proposed rule by the Drug Enforcement Agency. The prospect has prompted cannabis businesses to file amended returns claiming deductions for past tax years. Lawyers have suggested that businesses continue to file such claims, even though the IRS warns against it: “You never know what the law is going to bring.”
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