How the New Tax Bill Helps Families


How the New Tax Bill Helps Families

January 11, 2018

By Andrew Guernsey, Legislative Assistant for Government Affairs

The Tax Cuts and Jobs Act (H.R. 1 "TCJA"), signed into law by President Donald Trump on December 22, 2017, provides numerous provisions that benefit working families.

Child Tax Credit

The Child Tax Credit (CTC) has a positive impact on individual families and the economy as a whole and helps parents bear the costs of raising their children.

The Tax Cuts and Jobs Act increases the CTC for 2018 through the end of 2025 (unless Congress renews it) by:

  • Increasing the CTC to $2,000 for children under 17;
  • Making the CTC refundable up to $1,400 (indexed for inflation) for low-income working families based on
    • 15 percent of earned income in excess of $2,500; or
    • (if greater) the amount of payroll taxes in excess of the earned income tax credit, for a taxpayer with three or more qualifying children;
  • Removing the CTC marriage penalty for the income phase-out, and increasing the income threshold to $200,000 for single filers and $400,000 for married couples filing jointly;
  • Providing a $500 non-refundable Family Care Credit credit for dependents who don't receive the CTC; and
  • Requiring a qualifying child to have a Social Security Number for a taxpayer to claim the CTC

Obamacare's Individual Mandate Penalty

Starting in 2019, the Tax Cuts and Jobs Act eliminates Obamacare's individual mandate penalty. This helps many working families obtain relief from being forced into an Obamacare health insurance plan. Repealing the individual mandate penalty also allows individuals to forgo purchasing coverage if doing so violates their conscience. This is especially relevant for individuals who live in the states where there are few or no pro-life health insurance plans that exclude coverage of abortion.

Marriage Penalties

Marriage penalties exist in the tax code and also in welfare programs. The penalty generally applies in the tax code when a tax deduction or credit applies to single and married persons based on income, but a married couple is eliminated from receipt of the benefit making less than 200 percent of an eligible single person's income.

Income Tax Brackets

The Tax Cuts and Jobs Act has no marriage penalties for five of seven tax income brackets for 2018 through the end of 2025 (unless Congress renews it).

  • Marriage bonus in the 22 percent bracket. Married couples filing jointly have a 2 percent lower rate than single filers for the first $25,000 they make over $140,000 in taxable income. This is a maximum $500 bonus, decreasing income taxes by up to 1.41 percent.
  • Small marriage penalty in the 32 percent bracket. Married couples filing jointly have an 8 percent higher income tax rate than single filers for the first $5,000 they make over $315,000 in taxable income. This is a maximum $400 penalty, increasing income taxes by up to 0.61 percent.
  • Large marriage penalty in the 37 percent bracket. Married couples filing jointly have a 2 percent higher income tax rate than single filers for the first $400,000 they make over $600,000 in taxable income. This is a maximum $8,000 penalty, increasing income taxes by up to 2.59 percent.

Alternative Minimum Tax

The Tax Cuts and Jobs Act reduces marriage penalties for the Alternative Minimum Tax (AMT) for 2018 through the end of 2025 (unless Congress renews it) by removing the marriage penalty for the AMT income phase-out ($500,000 for single filers and $1 million for married couples filing jointly). TCJA retains the marriage penalty for the AMT exemption ($70,300 for single filers and $109,400 for married couples filing jointly).

  • Due to the marriage penalty in the AMT exemption,
    • Married couples filing jointly are taxed at 26 percent higher rate than single filers for the first $31,200 they make over $109,400 in taxable income. This is a maximum $8,112 penalty, increasing the AMT by up to 22.19 percent.
    • Married couples filing jointly have a 2 percent higher AMT tax rate than single filers for the first $31,200 they make over $295,700 in taxable income. This is a maximium $624 penalty, increasing the AMT by up to 0.71 percent.

Other Marriage Penalty Provisions

  • Retains a marriage penalty for the $10,000 State and local income tax (SALT), property tax, and/or sales tax deduction, which is equal in amount for single filers and married couples filing jointly. This is a maximum $3,700 penalty.
  • Removes the marriage penalty in the Child Tax Credit phase-out ($200,000 for single filers, $400,000 for married couples filing jointly).
  • Fails to address the marriage penalty for the Earned Income Tax Credit.

Alimony Deduction

The Tax Cuts and Jobs Act permanently repeals the alimony deduction, which subsidizes divorce. A divorced couple can often achieve a better tax result by receiving a tax break for payments between them than a married couple can. Removing the alimony deduction restores equitable treatment for divorced and married couples' expenses for child support.

529 Education Savings Accounts

The Tax Cuts and Jobs Act permanently allows 529 education savings accounts to be used for up to $10,000 per year per child for K-12 tuition expenses at an elementary or secondary public, private, or religious school.

529 plan contributions have tax-free earnings and are exempt from the annual federal gift tax if under $14,000 for that year ($28,000 for married couples filing jointly). Contributions to 529 plans receive significant tax breaks in many states. Previously, the 529 plans were only allowed to be used for higher education related expenses.

Death Tax

The Tax Cuts and Jobs Act doubles the tax exclusion from the estate tax, also known as the "death tax," thereby shielding from taxation the first $11.2 million (indexed for inflation) of bequeathed assets. This provision applies for 2018 through the end of 2025 (unless Congress renews it).

The death tax is double taxation that handicaps families, and particularly family-owned businesses, by imposing heavy and burdensome taxes on bequeathed assets. Families often work as a unit to build their small businesses, but when a parent dies with the intention of leaving his or her small business to the children who helped build it, that transfer of assets is often taxed at such high rates that the business cannot continue operating and pay the government, causing the grieving family to close the business's doors.

Adoption Tax Credit

The Tax Cuts and Jobs Act retains the adoption tax credit in current law, which is currently a $13,570 non-refundable credit per eligible child (with a phase out for wealthier individuals). According to the U.S. Department of Health and Human Services Administration for Children and Families, in 2015 over 111,000 children were waiting to be adopted. Maintaining the adoption tax credit in current law helps adoptive children find loving families.

Standard Deduction and Charitable Giving

The Tax Cuts and Jobs Act repeals the deduction for personal exemptions, including the taxpayer, the taxpayer's spouse, and any dependents. The legislation consolidates the personal exemption for the taxpayer and taxpayer's spouse into a larger standard deduction. The standard deduction is substantially increased from $6,300 to $12,000 for individuals and from $12,700 to $24,000 for married couples (and surviving spouses), giving working parents more take-home pay to provide for their families. The legislation consolidates the personal exemption for children and dependents into the expanded child tax credit and a new family tax credit to care for non-child dependents. However, increasing the standard deduction could harm charitable giving, including to nonprofits and churches, since fewer people will likely itemize.


Tony Perkins' Washington Update is written with the aid of FRC senior writers.


The Women on Death's Roe

January 11, 2018

Abortion may have taken 59 million lives since Roe v. Wade, but it's created at least 118 million victims. Every one of those children had a mother -- and not one of them will ever be the same again. For generations of women, a procedure that can take ten minutes will leave them with grief that lasts a lifetime. Groups like Planned Parenthood want us to believe that taking the life of an innocent baby is just a simple outpatient procedure. But according to countless women, the real pain begins once they leave the clinic. Lost somewhere in the pro-choice picket lines are the deeply personal stories of women trying to cope. And at least one researcher refuses to let that go.

Priscilla Coleman has spent years trying to expose the regrets of moms who've had abortions. Her latest study, just published in the Journal of American Physicians & Surgeons (in time for the 45th March for Life), ought to give us all a fresh compassion for the other face of the pro-life movement -- the mother. The Left has tried to wave off the depression women face after an abortion, but they'll have a much harder time doing that now with the release of Professor Coleman's powerful journal article, "Women Who Suffered Emotionally from Abortion: A Qualitative Synthesis of Their Experiences."

In it, 987 women who've had abortions talk openly about their regrets. What may surprise you is that the grief doesn't take sides. It haunts women on both sides of the political debate. According to the latest numbers, one in three women will have at least one abortion by the time she's 45, and almost all of them suffered emotionally as a result. Sixty-six percent told Coleman's team that they knew in their hearts they were making a mistake with their abortion, but most (58 percent) said they were doing it to make others happy. Sixty-seven percent said it was the hardest decision of their lives.

For many, the deep emotional scars were followed by a lifetime of guilt. Hurting, many reached out for help. Only 13 percent were seeing a counselor or psychologist before their first abortion -- a number that skyrocketed to 68 percent afterward. Others turned to medicine to cope. "Only 6.6 percent of respondents reported using prescription drugs for psychological health prior to the first pregnancy that ended in abortion, compared with 51 percent who reported prescription drug use after the first abortion. These data suggest that the women as a group were generally psychologically healthy before their first abortion."

In one of the more heartbreaking findings, Coleman asked women what the positives were of their abortion. "None" was the biggest answer. They don't talk about it in the rosy lens of freedom or feminism liberals use. On the contrary, most of these moms wished they'd known that taking a baby's life would dramatically change theirs. "Even in an ideal environment," the study explains, "wherein women receive adequate counseling, are offered support to continue their pregnancies, and do not present with established risk factors, it is still possible to be blindsided by an abortion and suffer ill effects due to the inherent complexity of abortion." Telling the truth has never been good for business in the abortion industry. But people need to understand that abortion isn't making a choice on life -- it's taking a chance with yours.

So when millions of Americans pack into cars and busses to come to Washington next week, join us in praying for the four decades of mothers who wake up every day knowing they made a decision they can't take back. Let's march for the survivors, giving them hope for healing; grace for regret.

For more information on the March for Life, which now includes House Speaker Paul Ryan (R-Wisc.), check out the official website.


Tony Perkins' Washington Update is written with the aid of FRC senior writers.


A "Washington Watch" Special Report: Next Tuesday

January 11, 2018

January 16 isn't just Religious Freedom Day -- it's a chance to catch a special broadcast of "Washington Watch with Tony Perkins." Join us online or on your local radio station as we discuss what the religious freedom accomplishments of the past tell us about how to confront present-day problems. We'll explain what strides we've made, the threats we're facing as a nation and in the world, and how you, as listeners, can protect your own religious liberty.

Experts Ryan Bomberger, former Congressman Frank Wolf, and others will offer their insights in the program, which kicks off at 5:00 p.m. (ET). Don't miss this important event! To access the live webcast, click here.


Tony Perkins' Washington Update is written with the aid of FRC senior writers.



Tony Perkins' Washington Update is written with the aid of FRC senior writers.


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