Despite Biden’s potential tax increases for large income earners, there are a number of potential tax credits:
• An expanded child tax credit (CTC). Increase the CTC which currently tops out at $2,000 up to a
maximum of $3,600 per child and make it FULLY refundable.
• An expanded child and dependent care credit. Expand the maximum credit to $8,000 (for one child and
to $16,000 for two or more children) from the current maximum of $3,000. Fifty percent of the credit
would be refundable.
• A new $5,000 credit for informal caregivers (family members or loved ones who do this work unpaid).
• A new credit of up to $15,000 for first-time homebuyers.
• An expansion of the existing premium tax credit that potentially makes state-sponsored health plans
• A renter’s credit to reduce rent and utilities to 30% of income for low-income taxpayers.
• An expansion of the earned income credit to workers older than 65 who do not have a qualifying child
i “Details and Analysis of President-elect Joe Biden’s Tax Plan” Garrett Watson et al, available at
https://taxfoundation.org/joe-biden-tax-plan-2020/#Key (October 22, 2020).
ii See https://www.irs.gov/tax-reform; See also https://www.irs.gov/newsroom/the-highlights-of-tax-reform-for-businesses iii Joe Biden Campaign, “A Tale of Two Tax Policies: Trump Rewards Wealth, Biden Rewards
Work,” https://joebiden.com/two-tax-policies/ (last seen on December 1, 2020). iv The Pease limitation (repealed under TCJA) reduces the value of itemized reductions for high income taxpayers. It works by reducing the value of a taxpayer’s itemized deductions by 3 percent for every dollar of taxable income above a certain threshold. v Not all pass-through businesses are eligible for the 199A 20% deduction. Once a business passes over an income threshold ($164,900 for individuals, $329,800 if married in 2021), then businesses that are considered a specified service trade or business (SSTB) start to get phased out of the 20% deduction. Businesses that are Non-SSTB do not have this limitation, however, once they pass an income threshold ($164,900 for individuals, $329,800 if married in 2021), they have their own test that must be passed in order to the get the deduction. See IRC Section 199A.