House Ways & Means Committee to Continue Federal Child Tax Credit Expansions through 2025
House bill to increase child tax credit by over $1000 for many struggling families, including immigrants, among other expansions, successfully passes committee.
SACRAMENTO-- After months of deliberation, the House Ways & Means Committee has cast their final votes to maintain Child Tax Credit (CTC) and Earned Income Tax Credit (EITC) expansions through 2025.
"We applaud the actions taken by the Senate to strengthen the Child Tax Credit and EITC, and we urge the full inclusion of the Ways and Means language in the final budget reconciliation package,” said Pete Manzo, President & CEO for United Ways of California (UWCA).“We know that over half of households with young children struggle to make ends meet according to our Real Cost Measure study. The first round of payments from the newly expanded CTC alone moved 3 million children above the poverty line, and extending that impact for years to come is a huge win for low-income children and their families.”
The expanded CTC and EITC include several key features:
- Extension of the increased Child Tax Credit amount: The increase in the CTC passed earlier this year as part of the American Recovery Plan, from what was once a maximum of $2,000 per child to $3,000 per child and $3,600 for children under age 6, is extended through 2025.
- Makes the CTC fully refundable: This means the full credit amount will go to families regardless of how they file their taxes.
- Permanently restores eligibility for the CTC to immigrant children with Individual Tax Identification Numbers (ITINs).
- Raises the maximum EITC for workers without children from roughly $530 to $1,500. Increases the income cap for these adults from $16,000 to at least $21,000.
- Eliminates barriers to EITC requirements based on age for younger and older workers. Eligibility will begin at age 19, with no upper age limit.
- Allocates $1 Billion dollars for community-based organizations to help with enrollment.
Key Takeaways from the Tax Credit Expansions
The CTC and EITC are widely considered our nation's most powerful tools to fight against poverty and reduce financial insecurity. These expansions will be critical to ensuring the communities most impacted by the financial crisis caused by COVID-19 are able to continue their recovery while affording basic necessities. While many advocates and community partners, including UWCA, organized around making the expansions permanent, this is a huge step in that direction and ensures that making the CTC and EITC permanent will continue to be central to future conversations as the policy nears its sunset date.
The permanent restoration of eligibility for children with ITIN numbers, who were excluded by the previous administration in 2017, will be an absolutely necessary component towards economic recovery within our immigrant communities and therefore all our communities. ITIN inclusion for the CTC will make roughly 1 million children eligible for the credit and provide hundreds of thousands of families with the much-needed financial resources to afford food and housing. UWCA, as a member of the CalEITC Coalition alongside over 60 other community-based organizations, fought for ITIN filers to be included in the statewide CalEITC and Young Child Tax Credit (YCTC) as they had been excluded from both state and federal benefits, putting their immigrant families and communities at a higher risk of financial insecurity. In addition, the coalition also proposed a bill this past year, SB 691 (Rubio) which would have granted increased CalEITC benefits for some 215,000 ITIN filers whom roughly 70% of which have at least 2 children.
Lastly, expanding the credit and age limits for low-income workers as well as workers without children is a much-needed amendment to how credits are allocated to some of our most vulnerable populations. UWCA and the CalEITC Coalition fought for and won similar provisions making all workers over 18 years old eligible for the CalEITC.