The chairmen of Congress’ top tax policy committees announced a bipartisan deal Tuesday to strengthen the child tax credit and revive a variety of tax breaks for businesses, a combination aimed at drawing support from lawmakers of both political parties .

The roughly $78 billion in tax cuts would be paid for by more quickly ending a tax break Congress passed during the COVID-19 pandemic that encouraged companies to keep workers on the payroll.

The agreement was announced by Senator Ron Wyden, the Democratic chairman of the Senate Finance Committee, and Representative Jason Smith, the Republican chairman of the House Ways and Means Committee. Lawmakers have been negotiating for months on a tax package that would address a range of priorities before lawmakers turn their attention to the election season.

Wyden said his goal is to pass the measure in time to benefit businesses and families during the upcoming filing season. The Internal Revenue Service will begin accepting and processing tax returns on January 29, so lawmakers are trying to pass the bill as quickly as possible.

Achieving that goal could prove difficult, as lawmakers are already rushing to finalize their spending bills and are considering a bill aimed at helping both Israel and Ukraine and stem the flow of migrants entering the country at the US-Mexico border. One option would be for House and Senate leaders to pair the measure with one of those top-priority bills.

In crafting the deal, Democratic negotiators were focused on boosting the child tax credit. The tax credit is $2,000 per child, but only $1,600 is refundable, making it available to parents who owe little to nothing in federal income taxes. The bill would increase the maximum refundable child tax credit incrementally to $1,800 for 2023 tax returns, $1,900 for the following year and $2,000 for 2025 tax returns.

The Center on Budget and Policy Priorities, a liberal think tank and advocacy group, predicted that about 16 million children in low-income families would benefit from the expansion of the child tax credit.

Given the current miserable political climate, having this opportunity to advance pro-family policies that help so many children move forward is a big deal, Wyden said in a statement announcing the deal.

Republicans focused on tax breaks for companies that they said would help the economy grow. The tax breaks in the bill would generally bring their expiration date at the end of 2025 in line with many of the other tax cuts passed in 2017.

Most notably, the bill allows companies of all sizes to deduct research and development costs immediately, rather than over a five-year period. It would also allow companies to fully deduct purchases of equipment, machinery and technology. And the bill also provides more flexibility in determining how much borrowing can be deducted.

Smith said the agreement strengthens Main Street businesses, increases our competitiveness with China and creates jobs.

Senate Majority Leader

Charles E.

Schumer (D-N.Y.) said he supported the tax package and said it has many things for both parties to celebrate. He praised the inclusion of an increased tax credit for the construction and renovation of housing for low-income households, saying he would not have been able to support the package without it.

The Low-Income Housing Tax Credit is one of the most effective tools available to increase the supply of affordable housing,” Schumer said. This package will make this credit much more generous and much easier to access.

Speaker Mike Johnson (R-La.) was scheduled to meet with Smith on Tuesday to discuss the tax treaty.

Some lawmakers have urged that any tax extensions be paid for so as not to widen projected deficits. The authors of the agreement seek to do that by hastening the elimination of the employee retention credit. Under current legislation, companies had until April 15 next year to claim the credit. The bill would bar additional claims after January 31 of this year. It would also increase penalties for tax preparers who fail to exercise due diligence when filing those COVID-19-related claims.

The tax credit is intended to make it easier for companies to keep their workers on payroll at a time when COVID-19 has kept people at home and away from stores, hotels and restaurants. The IRS announced in September a moratorium on processing new claims until at least the end of the year, following concerns that a significant portion of new claims from the aging program would not qualify.