Action on Build Back Better Act has come to a screeching halt in the Senate and prospects remain unclear on this $1.7 trillion bill. Senator Joe Manchin has indicated he cannot vote for the legislation as drafted and continues to express concern over its cost and the rise in inflation.
A key point is the enhanced child tax credit that expired at the end of the year and would be extended under the BBB. So, it’s back to the drawing board. Any new action looks to be weeks away as the Senate has its focus on updating Senate filibuster rules in the hopes of passing voting rights legislation and then both the House and Senate are in recess the week of January 24. This is good news for many of our clients who were concerned about the application of the 3.8% net investment tax applicability to S corporation profits or the disallowance of back-door Roth IRA contributions in 2022. Stay tuned!