CHN: Bill to Expand Tax Credits for Working Families Passes House Committee

The House Ways and Means Committee on June 20 passed legislation that would expand and improve the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) for working families. The Economic Mobility Act of 2019 (H.R. 3300) was introduced by Committee Chair Richard Neal (D-MA).

Among other improvements, the bill would, for the next two years, nearly triple the maximum EITC for workers who aren’t raising children in their homes (the sole group that the federal tax code taxes into, or deeper into, poverty); make the credit available for people who aren’t full-time students starting at age 19 up to age 66; and provide federal matching funds for Puerto Rico’s new EITC and would provide similar matching funds for other U.S. territories. Additionally, the bill would, for the next two years, make the CTC fully refundable so children in households with little or no earnings will benefit from it. It would also introduce a new Young Child Tax Credit (YCTC) worth an additional $1,000 for a child under age 4. The bill would also expand for two years the Child and Dependent Care Tax Credit, which subsidizes child care expenses, and make it refundable.

The Center on Budget and Policy Priorities estimates that the legislation would raise the after-tax income of 16 million childless adults. The bill’s CTC changes would benefit more than 42 million children.

The Committee also passed several other bills on June 20, including ones that would increase federal funding for the Child Care and Development Block Grant (H.R. 3298); continue roughly 30 expired or soon-to-expire tax provisions (known as “tax extenders”) and provide some tax benefits to victims of certain 2018 and 2019 natural disasters; and extend some tax benefits to same-sex married couples. As reported in the June 17 Human Needs Report, another bill previously introduced in the House and Senate, the Working Families Tax Relief Act, would also expand and improve the EITC and CTC in multiple ways.

Child Tax Credit
Earned Income Tax Credit
tax policy