H.R. 4935, Child Tax Credit Improvement Act of 2014

Cost Estimate
July 3, 2014

As ordered reported by the House Committee on Ways and Means on June 25, 2014

H.R. 4935 would increase the amount of the child tax credit and the income thresholds at which the credit begins to phase out for taxpayers. Under current law, an individual may claim a tax credit of $1,000 for each qualifying child under the age of 17. H.R. 4935 would index the $1,000 amount for inflation starting in 2015. In addition, under current law the aggregate amount of child credits that may be claimed is phased out for married individuals filing joint tax returns with modified adjusted gross income over $110,000 and for unmarried individuals with such income over $75,000. H.R. 4935 would increase the beginning of the phaseout for joint filers to $150,000, and it would index for inflation the beginning points of the income phaseouts for all taxpayers starting in 2015. For married taxpayers filing separately, the beginning of the income phaseout would increase from $55,000 under current law to $75,000, indexed for inflation.

The staff of the Joint Committee on Taxation (JCT) estimates that enacting H.R. 4935 would reduce revenues over the 2014-2024 period by about $93.9 billion, and increase direct spending by about $21.0 billion over that period. JCT therefore estimates that enacting the legislation would increase federal budget deficits by about $114.9 billion over the 2014-2024 period.

The Statutory Pay-As-You-Go Act of 2010 establishes budget-reporting and enforcement procedures for legislation affecting direct spending and revenues. Because enacting H.R. 4935 would affect revenues and direct spending, pay-as-you-go procedures apply.

JCT has determined that the bill contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act.