S.1382 - Family First Act (119th Congress)
Summary
The Family First Act (S.1382) proposes significant changes to the Internal Revenue Code of 1986, primarily focusing on enhancing the child tax credit and introducing a tax credit for pregnant mothers. It also includes provisions that simplify the earned income credit, eliminate the additional exemption for dependents, eliminate head of household filing status, and deny deductions for state and local taxes.
The bill aims to provide financial relief to families and pregnant mothers through tax credits. These changes are set to take effect for taxable years beginning after December 31, 2025.
Key provisions include increasing the child tax credit, creating a credit for pregnant mothers with unborn children of at least 20 weeks gestation, and altering various aspects of the earned income credit.
Expected Effects
If enacted, the Family First Act would alter the tax landscape for families, pregnant mothers, and individual taxpayers. The enhanced child tax credit and the new credit for pregnant mothers could provide substantial financial assistance to these groups.
However, the elimination of the additional exemption for dependents and the head of household filing status could increase the tax burden on some families. The denial of deductions for state and local taxes would disproportionately affect individuals in high-tax states.
These changes would necessitate adjustments to tax planning and compliance for individuals and families, and could have broader economic impacts depending on how the tax changes affect spending and investment decisions.
Potential Benefits
- Increased Child Tax Credit: Families with children under 6 could receive a base credit of $4,200 per child, and $3,000 for older qualifying children.
- Tax Credit for Pregnant Mothers: Pregnant mothers with unborn children of at least 20 weeks gestation could receive a tax credit of $2,800.
- Simplified Earned Income Credit: Changes to the earned income credit could provide additional benefits to low- and moderate-income taxpayers with or without children.
- Refundable Credits: Moving the child tax credit to subpart C would make it fully refundable, benefiting lower-income families.
- Inflation Adjustments: Several provisions include adjustments for inflation, helping to maintain the real value of the credits and deductions over time.
Most Benefited Areas:
Potential Disadvantages
- Elimination of Dependent Exemption: Eliminating the additional exemption for dependents could increase the tax burden on families with dependents.
- Elimination of Head of Household Status: Eliminating the head of household filing status could increase taxes for single parents.
- Denial of State and Local Tax Deductions: Denying deductions for state and local taxes could disproportionately affect individuals in high-tax states.
- Complexity: The interaction of various tax changes could create complexity for taxpayers and tax preparers.
- Potential for Abuse: The credit for pregnant mothers may be subject to fraud or abuse, requiring careful oversight and enforcement.
Most Disadvantaged Areas:
Constitutional Alignment
The bill's provisions related to taxation fall under the purview of Congress's power to lay and collect taxes, as outlined in Article I, Section 8, Clause 1 of the Constitution. The Sixteenth Amendment grants Congress the power to lay and collect taxes on incomes.
The proposed tax credits and deductions do not appear to infringe upon any specific constitutional rights. However, the credit for pregnant mothers could raise concerns related to privacy and reproductive rights, depending on how the certification process is implemented and enforced.
Overall, the bill's tax-related provisions are generally aligned with the Constitution's grant of power to Congress to levy taxes and provide for the general welfare.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).