The fate of four federal tax breaks for low-income families — all set to expire Jan. 1 unless renewed by Congress — will ultimately be decided with November's presidential election.
If allowed to expire, that will mean tax bill increases for many poor families nationwide and in Louisiana, according to nonprofit Louisiana Budget Project.
The credits set to expire are the products of George W. Bush's Tax Relief Reconciliation Act and President Barack Obama's 2010 Tax Relief Act. They include The Child Tax Credit, Earned Income Tax Credit, Child and Dependent Care Credit and the American Opportunity Credit.
Roberton Wiliiams, a senior fellow at the Tax Policy Center, tells CNNMoney that failing to renew the credits will mean tax bill increases ranging from hundreds to thousands of dollars, even for poor families.
"If you have what it takes to qualify for these particular benefits, you will get hit," says Williams.
According to CNNMoney, allowing all four of the credits to expire will mean:
Some families will take a hit on several fronts if they qualify for more than one tax break. A low-income couple with three kids, for example, will lose as much as $1,500 from expiring provisions of the Child Tax Credit. If their income is low enough, they could also see a smaller refund from the Earned Income Tax Credit, and benefits from the Child and Dependent Care Credit could be reduced as well.
As noted by CNNMoney, the fate of renewing these credits will hinge on re-electing Obama:
The upcoming presidential election has left the fate of these tax breaks uncertain. Democrats and Republicans in Congress continue to butt heads about which tax cuts should be extended, and there's virtually no chance they will agree on a specific plan before the November election, Williams said.
Even if an agreement is reached by the end of the year — which is far from a sure thing, either — next year's tax policy will ultimately depend on who takes over the Oval Office.
Click here for CNNMoney's breakdown on how low-income American families will be impacted by the expiration of each of the four credits.
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