Senators Shaheen & Hassan Push for Tax Credit Expansion for Hard-Working Families in Next COVID-19 Relief Package

May 01, 2020

Senators Call for Expanding Earned Income Tax Credit, Child Tax Credit During the Economic Downturn Caused by the COVID-19 Pandemic

WASHINGTON – U.S. Senators Jeanne Shaheen and Maggie Hassan today called for a temporary expansion of the Earned Income Tax Credit and the Child Tax Credit in the next COVID-19 relief package. As the economic effects of COVID-19 are expected to last into next year, this would put money back in the pockets of hard-working Granite Staters and Americans to help weather the economic downturn. The letter, which was sent to Senate leadership, was led by Senators Sherrod Brown (D-OH), Michael Bennet (D-CO), Dick Durbin (D-IL) and Ron Wyden (D-OR).

“COVID-19 has presented our nation with an unprecedented public health challenge. This Congress has taken several bipartisan steps to address it, along with the resulting economic effects we’ve already seen. However, additional measures are critical to confront and reverse ongoing economic paralysis. The [Earned Income Tax Credit] and the [Child Tax Credit] are proven and effective tools to increase financial stability for workers and their families. Expanding them will provide much needed support to families and boost our economy as our nation recovers from COVID-19,” the Senators wrote.

The Senators’ letter calls for filling gaps in the Earned Income Tax Credit that leave out the youngest adult workers, workers not raising children in the home, and the lowest-income families. Currently, the youngest adult workers – including some on the front lines of the pandemic such as health aides, grocery store clerks, and truck drivers – are ineligible for the credit. Additionally, workers not raising children in the home are only eligible for a small credit. In all, five million workers without children receive only a small Earned Income Tax Credit benefit.

The letter also calls for making the Child Tax Credit fully available to all children as a refundable credit and increasing the credit amount for kids under 6 years of age, to provide additional support to children and families at a time in life that is critical for cognitive development. As the economic effects of COVID-19 continue, these changes to the Child Tax Credit will benefit 26 million kids whose families currently cannot receive the full value of the $2,000 credit. 

Together, these expansions will provide support to the workers and families who will be hit the hardest and affected the longest by this crisis.

Senators Hassan and Shaheen also joined their colleagues in introducing the Working Families Tax Relief Act, which would cut taxes for workers and families by expanding the Earned Income Tax Credit and Child Tax Credit. As part of her efforts to expand economic opportunity for hard-working Granite Staters, Senator Hassan also introduced the Middle Class Tax Break Act that would create a $1,000 Working America Tax Credit for middle class families who have earned income up to $200,000.

A copy of the Senators’ letter to Senate Leaders can be found here and below.

Dear Leader McConnell and Leader Schumer:

The economic havoc brought about by COVID-19 will have wide-ranging and long-lasting effects, especially on low-wage workers, children, and their families. CBO expects unemployment to rise to 16% and then hold at levels of 10% through the end of 2021. More aggressive policy steps must be taken to get the economy back on an acceptable path. To help address this, we urge you to include a temporary expansion of the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC) in the next coronavirus legislative package, to take effect for tax year 2020.

COVID-19 has presented our nation with an unprecedented public health challenge. This Congress has taken several bipartisan steps to address it, along with the resulting economic effects we’ve already seen. However, additional measures are critical to confront and reverse ongoing economic paralysis. The EITC and the CTC are proven and effective tools to increase financial stability for workers and their families. Expanding them will provide much needed support to families and boost our economy as our nation recovers from COVID-19.

The EITC promotes work and provides a financial boost to low-wage workers and their families. However, gaps in EITC mean that millions of people are left out. Low-wage seniors over 64 and the youngest adult workers not raising children in the home are locked out entirely: their EITC benefit is zero. In all, five million workers without children are taxed into or deeper into poverty, receiving only a small EITC benefit. Across our country, we have seen the importance of people who do essential jobs but are paid too little. An expanded EITC would provide additional income to supplement their limited earnings. Among the people who would benefit the most from a robust childless adult EITC are cashiers, health-aides, and truck drivers – workers on the front lines of coronavirus. We must fill the existing gaps and increase the size of the credit generally.

The CTC provides a $2,000 credit to eligible families with children. Unfortunately, it currently leaves behind approximately 26 million children. That’s because their families either qualify for no credit at all, or because they qualify for less than the full $2,000. The time is now to fix these obvious flaws by making the CTC fully available to all children as a refundable credit. Doing so would provide the biggest boost to the poorest families, by simply providing them the same amount that more well-off families already receive. We should also increase the credit amount for kids under 6 years of age, to provide additional support to children and families at a time in life that is critical for cognitive development.  

We must respond to this unprecedented challenge with policies that provide support to the workers and families who will be hit the hardest and affected the longest by this crisis. Doing so also serves as effective economic stimulus, delivering efficient results to American taxpayers. Our Working Families Tax Relief Act, legislation that we are all sponsoring this Congress, provides the model for making these critical improvements to the EITC and CTC. Working families are depending on us to meet this extraordinary moment by providing them with the support they need to weather the ongoing economic effects of COVID-19 in the years to come. We must deliver for them.