The House joined the Senate in avoiding the fiscal cliff when it passed the Tax Relief Extension Act late Tuesday evening by a vote of 257 to 167.
The legislation keeps the Bush era tax cuts for individuals making less than $400,000 and couples making less than $450,000 a year. That means the rate on the wealthiest Americans will go back up to 39.6 percent. The capital gains and dividend tax rate will increase from 15 percent to 20 percent.
The legislation passed the U.S. Senate on an 89-8 vote early Tuesday morning.
The bill, which President Barack Obama said he would sign, also extends federal unemployment insurance for 2 million Americans, including 43,000 in Connecticut who would have lost their emergency unemployment benefits if Congress failed to act. The deal brokered by Senate Minority Leader Mitch McConnell of Kentucky and Vice President Joe Biden also extends the Child Tax credit, Earned Income Tax Credit, and the president’s new American Opportunity Tax credit, which helps families pay for college. The agreement also increases the estate tax rate from 35 to 40 percent on estates worth more than $5 million.