Many low-income parents could see their tax bills jump by thousands of dollars next year if nothing is done to stop a series of tax breaks from expiring January 1.
Unless Congress takes action before the end of the year to extend tax cuts that were introduced under the Obama and Bush administrations, four important credits for families -- The Child Tax Credit, Earned Income Tax Credit, Child and Dependent Care Credit and the American Opportunity Credit -- will revert back to previous levels.
If this happens, many families will be worse off by hundreds -- or even thousands -- of dollars, said Roberton Williams, a senior fellow at the Tax Policy Center.
"If you have what it takes to qualify for these particular benefits, you will get hit," said Williams.
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.
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