A bigger tax break for parents and companies is getting closer to becoming a reality

• Talks are continuing on a tax deal that would provide relief for parents and businesses.
• A bipartisan push would restore some expansions to the Child Tax Credit and business deductions.
• However, any tax changes face a short deadline and a tight legislative squeeze.

There might be welcome tax news for parents and businesses soon — if legislators are finally able to wrangle a deal.

A bipartisan group of lawmakers, led in part by Senate Finance Committee Chair Ron Wyden, a Democrat, and Republican House Ways and Means Committee Chair Jason Smith, has reportedly been negotiating a bill that would expand the Child Tax Credit while reupping some tax benefits for businesses. And the lawmakers behind the push seem to be optimistic, according to a new report from Semafor's Joseph Zeballos-Roig.

"We've made a substantial kind of progress," Wyden told Semafor. "We've already prevailed on a crucial issue, which is that there's going to be equal treatment for working families with business."

Similarly, Semafor reports that Smith said that "things are progressing really, really well."

Ryan Carey, a spokesperson for Wyden, told BI last week that discussions were "ongoing" and "productive."

"The goal remains for changes to take effect in time for this upcoming filing season," Carey said. Spokespeople for the Senate Finance Committee and Ways and Means Committee did not immediately respond to a request for comment from BI.

The package would revive two measures that Democrats and Republicans respectively have been vying for: Beefing up relief for parents, and restoring expired business deductions. As part of President Donald Trump's 2017 tax law, a provision that allows businesses to fully deduct research and development expenses expired in 2022. Republicans are eager to restore that.

At the same time, Democrats have been pushing for some renewal of pandemic-era expansions to the Child Tax Credit that expired in December 2021. Under the American Rescue Plan, the Child Tax Credit — which currently maxes out at $2,000 per qualifying child — was expanded up to $3,600 per child for families who have kids under the age of six. The credit was also made partially refundable, meaning that parents could receive half of the credit in monthly checks.

In its expanded form, the ARP CTC kept 3 million children out of poverty with just its first round of payments and fed 2 million children in the first month it was distributed. After the enhanced credit expired in December 2021, child poverty was 38% higher in February 2022, as 3.4 million children fell into poverty.

However, any potential tax deal that would boost parents' and businesses' wallets still faces roadblocks and a tight timeline for passage. Wyden told Semafor that he'd want the package in front of President Joe Biden by January 29, when filing season begins.

"We have to put together a bipartisan, bicameral agreement that will be able to not only survive a filibuster, but survive the dynamics in the House," Senator Mike Crapo, a Republican who sits on the Senate Finance Committee, told HuffPost.