House Ways and Means Sets Tax Bill Markup for the Week of April 27

The House Ways and Means Committee announced Friday that it will begin formal markup on a second tax package the week of April 27, with hearings scheduled for Tuesday morning and a chairman's mark expected to drop late Monday evening. Chairman Jason Smith of Missouri said in a statement that the bill is meant to address what was left out of the December 2025 reconciliation package, including the state and local tax deduction cap, the Section 199A pass-through deduction extension, and an expanded child tax credit structure. The schedule puts the bill on a path to clear committee by May 1 and reach the House floor by mid-May if no procedural delays emerge.

The state and local tax deduction is the most politically charged piece. The current cap of $10,000 was extended in December but is set to step down to $8,000 in 2027 under the deal that passed last year. Republicans from New York, New Jersey, and California have been pushing leadership to lift the cap to $25,000 for joint filers earning under $500,000, and the chairman's draft is reported to land near that figure. Democrats on the committee have said they will not support the bill unless the SALT increase is paired with a higher individual top rate, which Chairman Smith has ruled out.

Section 199A, which gives a 20 percent deduction to qualified pass-through business income, expires at the end of 2026 under current law. The draft would make the deduction permanent and broaden the income limits, a priority that small business associations including the National Federation of Independent Business have been lobbying for since January. The Joint Committee on Taxation has scored a permanent extension at roughly $720 billion over ten years, a number that will become a flashpoint during markup.

The child tax credit piece is where the political math gets interesting. The draft proposes raising the credit to $2,500 per child and making the refundable portion fully available to families earning as little as $5,000 in earned income. That structure is a compromise between the Romney-Bennet expansion proposal that died in the Senate last fall and the more limited version House Republicans favored in 2024. Senator Josh Hawley has signaled he could vote for the package in the Senate if the refundable structure stays intact.

For working families and first-generation business owners, the most relevant pieces of the bill are the SALT cap and the pass-through deduction. Anyone running a service business as an LLC or S corp uses Section 199A every year. Small business owners in Nashville, Atlanta, and Charlotte who have built up over the last decade have come to count on that 20 percent shave off the top, and a permanent extension would remove the planning uncertainty that comes with watching a major deduction sunset every few years. The SALT change matters in higher cost markets but does not move the needle in Tennessee, which has no state income tax.

The expanded refundability of the child tax credit would have a real effect for families earning between $20,000 and $50,000 a year. Under current rules, a family with two kids and $25,000 in earned income gets only a partial credit. Under the draft, that same family would qualify for the full $5,000. The Center on Budget and Policy Priorities estimates that change alone would lift roughly 3 million children out of poverty in any given year if the structure holds.

Procedurally, the bill faces a tighter window than last year's package. The House recesses for Memorial Day on May 22 and does not return until June 2, which gives the Rules Committee about three weeks to move the bill from markup to floor passage. Speaker Mike Johnson has said leadership wants the bill on the President's desk by July 4 to give Treasury time to issue guidance before tax planning season. That timeline assumes the Senate moves quickly, which is not guaranteed given the Senate's heavier May calendar around the DHS reconciliation cleanup and the Cekada nomination.

The hearings Tuesday will feature testimony from the Joint Committee on Taxation, the Tax Foundation, and the Center for American Progress. Watch for the JCT score on the SALT cap change, which is the number that will drive the final shape of the bill. If the SALT lift comes in higher than expected on cost, the committee may have to find offsets, and the most likely target is a tightening of carried interest treatment or a new minimum tax on private foundations. Both of those would draw their own opposition from different corners of the Republican caucus.

The committee is scheduled to convene at 10 a.m. Tuesday in Longworth 1100. The hearing will be carried live on the committee's YouTube channel and on C-SPAN3. Members on both sides of the aisle have already signaled this will be a long session.