One Year Stronger: Neal Hails Tax Cuts for Families and Workers

Feb 22, 2022
Press Release
The American Rescue Plan passed the House of Representatives on February 27, 2021

SPRINGFIELD, MA – Today, nearly one year after the House’s passage of the American Rescue Plan Act of 2021 (ARP), Ways and Means Committee Chairman Richard E. Neal (D-MA) highlighted the package’s inclusion of transformative tax credits for families and workers. The expanded versions of Child Tax Credit (CTC), Earned Income Tax Credit (EITC), and Child and Dependent Care Tax Credit (CDCTC) put money back into families’ pockets and stopped the taxation of low-wage workers into poverty.  

“This filing season, workers and families will continue to feel financial relief from our expanded tax cuts in the American Rescue Plan,” Chairman Neal said. “By making the CTC fully refundable, and by expanding the reach and increasing the value of the EITC , these powerful anti-poverty tools are now much more inclusive and equitable. Before the ARP, nearly one-third of our nation’s kids – including half of all Black and Hispanic children – were excluded from the child tax credit because their families earned too little to qualify for it. The changes we made in the ARP made the tax code work better for American families and workers, and that’s why Ways and Means Committee Democrats extended the CTC and EITC enhancements in the Build Back Better Act.” 

Specifically, the American Rescue Plan Act:

  • Expanded the Child Tax Credit from $2,000 to $3,000 for children age 6 and over and to $3,600 for children under 6 and made the credit fully refundable and advanceable in 2021.
    • An analysis of U.S. Census Bureau Data found that 91 percent of low-income families used their monthly Child Tax Credit to afford their basic needs.
    • By December 2021, the Child Tax Credit had reached 61.2 million children and kept 3.7 million children from poverty.
  • Nearly tripled the maximum Earned Income Tax Credit for individuals without qualifying children (the largest expansion since 2009), and broadened eligibility to better reflect today’s workforce;
    • An estimated 17.3 million low-paid workers benefitted from the change. 
  • Increased and expanded the Child and Dependent Care Tax Credit to be more generous and fully refundable.
    • A family making up to $125,000 who spends $16,000 on child care or other qualifying expenses can receive up to an $8,000 credit.