January is shaping up to be an unusually busy month for Congress. First up, a successful discharge petition effort by House Minority Leader Hakeem Jeffries (D-NY) will force a vote on a clean three-year extension of the enhanced Affordable Care Act (ACA) premium tax credit (PTC) this month. The bill is expected to pass the House but faces an uncertain future in the Senate, where Republicans may pivot to a partisan reconciliation bill focused on broader healthcare issues. Next, Congress is facing a January 30 government funding deadline for nine of 12 annual appropriations bills, including the bill that provides funding to the Department of the Treasury and the Internal Revenue Service (IRS). Absent a bipartisan agreement to fund the government for the full fiscal year, another short-term continuing resolution (CR) or another shutdown is possible. 

It is important to monitor these potential multiple legislative vehicles as they could provide a vehicle for not only additional tax relief – such as an extension of the work opportunity tax credit or other "tax extender" provisions that expired at the end of 2025 – but also for potential tax increases to fund these initiatives.

Significant fiscal legislation, even by budget reconciliation, is difficult – but not impossible – in a midterm election year. The Inflation Reduction Act is a recent example of such a bill. The potential January bills could provide Congress with a head start for enacting meaningful legislation in advance of the midterm elections. #TaxTake
 

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