Category: Refundable Tax Credits
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In just six short months, the enhanced Child Tax Credit (CTC), enacted as part of the American Rescue Plan (ARP), decreased the number of children living in poverty by 40 percent. ITEP estimated that the lowest-income 20 percent of households with children would receive a 35 percent income boost from this policy alone in 2021. This is a meaningful, life-changing sum. -
Joe Hughes
Federal Policy AnalystMillions of children in low-income families fared better last year thanks to expansions of the Child Tax Credit (CTC). But, as has been widely reported, the monthly payments of the improved CTC that started in July 2021 ended on Dec. 15 because one Democratic senator and all Republican senators opposed the Build Back Better Act […] -
Steve Wamhoff
Director of Federal Tax PolicyCongress expanded the Child Tax Credit (CTC) and Earned Income Tax Credit (EITC) for 2021 as part of the American Rescue Plan Act (ARP). The additional benefits that millions of families and workers received under that law will end this month if Congress does not act soon. The CTC expansion boosted the annual tax credit […] -
ITEP Staff
December 9, 2021
Tax Credits in Build Back Better Support Millions of Families
Download the Fact Sheet Millions of people across the nation are better off financially thanks to temporary Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) expansions included in the March 2021 American Rescue Plan. Congress can ensure families continue to have the resources they need to thrive by passing the Build Back Better […] -
Aidan Davis
Senior State Policy AnalystDownload National and State-by-State Data Download Fact Sheet The Build Back Better plan working its way through Congress would bring transformative changes on many fronts, including to tax credits that bolster the incomes and economic security of millions of families. The version of the plan before the U.S. House of Representatives would extend temporary improvements […] -
Neva Butkus
State Policy AnalystSeptember 14, 2021
New Census Data Highlight Need for Permanent Child Tax Credit Expansion
Millions of families struggled to make ends meet before Covid-19, and they continue to bear the brunt of the pandemic. Low- and moderate-income workers in the earliest days of the crisis lost their jobs at disproportionately higher rates because they did not have the luxury of working from home or they worked in essential or […] -
Aidan Davis
Senior State Policy AnalystThere is a lot to commend in the Ways and Means committee’s proposal to temporarily extend and, in some cases, make permanent federal tax credit enhancements. ITEP today analyzed the number and share of children nationally and in each state who would benefit from extending provisions making the CTC fully refundable. Nationally, 27 million children, […] -
Aidan Davis
Senior State Policy AnalystFor the next six months, low-, middle- and upper-middle-income families with children are eligible to receive part of their 2021 Child Tax Credit (CTC) in advanced monthly payments. More than putting money in people’s pockets, this policy recognizes “the dignity of working-class families and middle-class families,” as President Biden said last week. -
Aidan Davis
Senior State Policy AnalystNearly one in seven children in the United States live in poverty and about 6 percent of all children live in deep poverty. President Joe Biden’s American Families Plan would tackle child poverty in an immediate, meaningful way. It is expected to extend the one-year Child Tax Credit (CTC) enhancements included in the March 2021 American Rescue Plan (ARP) through 2025. Next year alone, this would provide around a $110 billion collective income boost to roughly 88 percent of children in the United States. -
Aidan Davis
Senior State Policy AnalystOverall, the EITC enhancement would provide a $12.4 billion boost in 2022 if made permanent, benefiting 19.5 million workers. It would have a particularly meaningful impact on the bottom 20 percent of eligible households who would receive more than three-fourths of the total benefit. Forty-one percent of households in the bottom 20 percent of earners would benefit, receiving an average income boost of 6.3 percent, or $740 dollars. -
Marco Guzman
State Policy AnalystAs the Biden administration maps out the next steps in America’s response to the coronavirus pandemic—through what is now being called the American Families Plan—it should make sure a proposed expansion of the Child Tax Credit (CTC) includes undocumented children who have largely been left out of federal relief packages this past year. Prior to 2017 Tax Cut and Jobs Act, all children regardless of their immigration status received the credit as long as their parents met the income eligibility requirements. This change essentially excluded around 1 million children and their families. -
Steve Wamhoff
Director of Federal Tax PolicyFebruary 9, 2021
Details of House Democrats’ Cash Payments and Tax Credit Expansions
The House Ways and Means Committee published its proposal for the cash payments, tax provisions and other changes that would make up part of the $1.9 trillion COVID relief legislation that President Joe Biden called for a few weeks ago. -
Aidan Davis
Senior State Policy AnalystTemporarily modifying the structure of the EITC to reflect the realities of our current economy could provide a vital lifeline to low-income workers who have seen their incomes disappear during this crisis. What follows are a few such ideas which could be implemented at either the federal or state levels, or both. -
March 24, 2020
NEW ANALYSIS: House Democratic Stimulus Bill Explained
Breaking ITEP analysis explains how a newly-introduced House Democrats' proposal—far more comprehensive and better targeted than the recently failed GOP Senate bill—combines overdue expansion of the Earned Income Tax Credit and Child Tax Credit with direct rebates to reach workers and families across all income groups. -
Steve Wamhoff
Director of Federal Tax PolicySeptember 17, 2019
Julián Castro Provides the Latest Proposal to Expand Refundable Tax Credits
New estimates from ITEP show that Julián Castro’s refundable tax credit proposal would mostly benefit the bottom 60 percent of households and would have a cost ($195 billion in 2020) that places it roughly in the middle of the different tax credit proposals that Democrats have offered over the past several months. -
Jessica Schieder
Federal Tax Policy FellowRefundable federal tax credits, including the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC), lifted 7.9 million people out of poverty in 2018. This latest analysis from the U.S. Census Bureau demonstrates the power of federal programs to alleviate poverty and help low-income families keep up with the increasing cost of living. -
Steve Wamhoff
Director of Federal Tax PolicyA refundable tax credit proposed by Rep. Rashida Tlaib (D-MI) would be more expansive than other recent tax credit proposals, new estimates from ITEP show. Rep. Tlaib’s proposal, unlike others, does not require households to work to receive the benefit. -
Alan Essig
Executive DirectorUsing the tax code to boost the economic security of low- and moderate-income families is a proven strategy. These bold proposals would go much further than any policy currently on the books, and their approach directly contrasts with longstanding supply-side theories that call for continual tax cuts to those who are already economically faring far better than everyone else. -
Steve Wamhoff
Director of Federal Tax PolicyA new ITEP report examines five big proposals that have been announced this year to create or expand tax credits to address inequality and help low- and middle-income households. -
Aidan Davis
Senior State Policy AnalystA new federal proposal, the Livable Incomes for Families Today (LIFT) the Middle Class Act, would create a new refundable tax credit for low- and middle-income working families who were little more than an afterthought in last year’s federal tax overhaul. This proposal would take the place of TCJA, providing tax cuts similar in cost to the recent federal tax law but targeted toward working people rather than the wealthy. ITEP analyzed the bill, proposed by California Senator Kamala Harris, and compared its potential impact to TCJA. -
Steve Wamhoff
Director of Federal Tax PolicyThe latest news on the GOP tax bill is that, in order to secure the vote of Senator Marco Rubio, Republican leaders have agreed to expand the child tax credit — but only by a fraction of the amount that Rubio initially demanded. -
Steve Wamhoff
Director of Federal Tax PolicyOne of the findings is that every income group would face higher personal income taxes in years after 2025 (including 2027). Chained CPI would gradually push taxpayers into higher income tax brackets and make the standard deduction, the Earned Income Tax Credit, and several other breaks less generous over time. The switch to chained CPI would cause some low-income people to face a tax hike starting in 2019, the second year the plan would be in effect. -
Misha Hill
Policy AnalystSeptember 15, 2017
Poverty is Down, But State Tax Codes Could Bring It Even Lower
The U.S. Census Bureau released its annual data on income, poverty and health insurance coverage this week. For the second consecutive year, the national poverty rate declined and the well-being of America’s most economically vulnerable has generally improved. In 2016, the year of the latest available data, 40.6 million (or nearly 1 in 8) Americans were living in poverty.
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