The expanded Child Tax Credit from the American Rescue Plan was touted as a once-in-a-lifetime achievement toward reducing child poverty. But it was passed as a temporary tax measure. Temporary tax policy makes tax filing confusing, and the IRS has shown that it isn’t able to keep pace with being a social administrator and a tax collector. We discuss what taxpayers need to know about the ever-changing Child Tax Credit and how it may impact taxpayers this spring.
Alabama lawmakers are acting to ensure that federal relief from the American Rescue Plan Act does not increase tax liabilities in the state.
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Amid record surpluses, Michigan lawmakers are looking to give relief to taxpayers and enhance the state’s competitive standing.
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Denmark (55.9 percent), France (55.4 percent), and Austria (55 percent) have the highest top statutory personal income tax rates among European OECD countries.
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Consumer prices rose by 7 percent in 2021, the highest annual rate of inflation since 1982. Where did this inflation come from and what might its impacts be? Tax and fiscal policy offer important clues.
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The National Taxpayer Advocate argued the IRS telephone service “was the worst it has ever been” in 2021, with an answer rate of about 11 percent.
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Twenty-one states and D.C. had significant tax changes take effect on January 1, including five states that cut individual income taxes and four states that saw corporate income tax rates decrease.
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Tax extenders this year can be split into three rough groups: expiring parts of the Tax Cuts and Jobs Act (TCJA), expiring parts of various COVID-19 economic relief packages, and the Island of Misfit Extenders.
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France’s individual income tax system is the least competitive of all OECD countries. It takes French businesses on average 80 hours annually to comply with the income tax.
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Norway’s proposed reductions in income tax have the potential to increase disposable income for workers that can potentially raise consumption and contribute to economic growth. However, the increase of the wealth and indirect taxes is likely to step up the complexity of the tax system and create additional distortions.
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The IRS recently released the new inflation adjusted 2022 tax brackets and rates. Explore updated credits, deductions, and exemptions, including the standard deduction & personal exemption, Alternative Minimum Tax (AMT), Earned Income Tax Credit (EITC), Child Tax Credit (CTC), capital gains brackets, qualified business income deduction (199A), and the annual exclusion for gifts.
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Through 10 ballot measures across four states—Colorado, Louisiana, Texas, and Washington—voters will decide significant questions of state tax policy.
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The intentions behind federal deductibility are undoubtedly pro-taxpayer. Unfortunately, that is not what happens in practice. Tax liability is not reduced. It is distorted.
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President Biden expanded and fundamentally changed the Child Tax Credit (CTC) for one year in the American Rescue Plan (ARP) passed in March 2021. Policymakers are now deciding the future of the expansion as part of the proposed reconciliation package, but a wide range of estimates for the effects of a permanent expansion is confusing the debate.
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Inflation is often called a hidden tax, but in many states it yields a far more literal tax increase as tax brackets fail to adjust for changes in consumer purchasing power.
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Two major provisions in the federal tax code have been limited since the Tax Cuts and Jobs Act (TCJA) of 2017: the state and local tax (SALT) deduction and the home mortgage interest deduction (MID).
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Our analysis illustrates how restoring the SALT deduction now would be more regressive than under prior law, strengthening the case for keeping the cap in place.
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Congressional lawmakers are putting together a reconciliation bill to enact much of President Biden’s Build Back Better agenda. Many lawmakers including Senate Finance Committee Chair Ron Wyden (D-OR), however, want to make their own mark on the legislation.
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Over the next ten years, the structure of the Child Tax Credit (CTC) is scheduled to change, complicating efforts to extend enhanced CTC benefits or reform the CTC for the long-term. Rather than take an all-or-nothing approach or kick the can down the road by relying on temporary expansions, lawmakers could consider alternative options that better target low-income households, retain work incentives, reduce the impact on federal revenue, and provide taxpayers with a stable, consistent tax code.
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