House and Senate Republicans on Friday released the final text of their legislative agreement on taxes, after negotiators from both chambers worked out the differences between their two bills. Significantly, the final agreement eliminates the individual mandate penalty under Obamacare, something the original Senate bill did but the House bill did not.
The success of the final legislationFriday, after Sen. Bob Corker, R-Tennessee, said he would vote for the bill, and Sen. Marco Rubio, R-Florida, seemed to have his concerns about the generosity of the child tax credit satisfied. The House is expected to vote on the legislation Tuesday, and the Senate after that. No Democrats are expected to vote for the legislation.
Here are the details of the final tax agreement, according to highlights from the conference committee:
- Eliminates penalty under the Affordable Care Act for failing to have health insurance
- Lowers corporate tax rate from 35 percent to 21 percent (higher than the original 20 percent in the House and Senate bills)
- Reduces top effective marginal tax rate for S corporations to a top rate of 29.6 percent, allowing for a 20 percent tax deduction that applies to the first $315,000 of joint income earned by all S-corporations
- Eliminates corporate Alternative Minimum Tax (AMT); increases the exemption amount from the AMT for individuals
- Keeps seven individual tax brackets, although those brackets would change.
- Continues to exempt the value of tuition waivers from taxes (the GOP , and thus, taxable.)
- Increases the refundable portion of the child tax credit to $1,400, thanks to Rubio's insistence. The overall child tax credit will increase from $1,000 to $2,000.
- Roughly doubles the standard deduction, from $6,350 to $12,000 for individuals, and from $12,700 to $24,000 for married couples filing jointly
- Preserves the child adoption tax credit
- Allows filers to write off the cost of state and local taxes, but only up to $10,000. Filers must choose from among sales, income and property taxes for the deduction, instead of being able to deduct all local taxes.
- Preserves the mortgage interest deduction for all homeowners with existing mortgages, and for homeowners with new mortgages, the home mortgage interest deduction will be available up to $750,000
- Preserves the charitable deduction as it is
The GOP claims the bill will mean a $2,059 tax cut for a family of four earning the median family income of $73,000.
CBS News' Catherine Reynolds and Kathryn Watson contributed to this report.