House Approves Expanded Version of Child Tax Credit Legislation

On June 12, 2003, the House approved its version of legislation to fix the child tax credit, the All-American Tax Relief Bill of 2003 (H.R. 1308), by a vote of 224 to 201. The House bill is expected to cost $82 billion over ten years as compared to $10 billion for the Senate version. The House bill includes provisions similar to those in the Senate bill increasing the refundability of the child tax credit and increasing the phase-out range for the child tax credit to eliminate the marriage penalty. The House bill would also maintain the child tax credit at $1,000 through 2010. Also added by the House are the provisions of a House-passed armed forces tax bill that would expand the home sale exclusion for military and foreign service personnel, give a full tax exemption to military death gratuity benefits, allow tax-free treatment to Homeowners’ Assistance Program payments that cover military base closures, exempt payments made under the military dependent care assistance program, permit penalty-free distributions from education savings accounts to those appointed to military academies, and allow National Guard and reserve members an above-the-line deduction of up to $1,500 for unreimbursed travel expenses. The bill would also modify the membership requirements for veteran organizations, suspend the tax-exempt status of terrorist organizations, and extend certain tax relief provisions to astronauts. Unlike the Senate bill, which is fully offset, the House bill contains no offsets. The bill now appears headed for conference, where it may be difficult to craft a compromise that will be able to pass in both the House and the Senate. The President appears willing to sign the legislation if it reaches his desk.


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