Menendez: Expanded Tax Credits “Will Lift Millions of Hardworking Families Out of Poverty”

U.S. Senator Bob Menendez (D-N.J.), a senior member of the Senate Finance Committee that sets national tax policy, applauded the expansion of the Child Tax Credit (CTC), Earned Income Tax Credit (EITC) and Child and Dependent Care Tax Credit (CDCTC), which were included in the American Rescue Plan and “will lift millions of hardworking families out of poverty.”

Under the American Rescue Plan, the CTC will be expanded to $3,600 for each child under the age of six and $3,000 for children under 18 years of age. This assistance will be fully refundable for low-income parents and families will be able to receive monthly payments instead of an annual lump sum. The EITC expansion included in this bill is the largest increase in over a decade, and will greatly benefit childless workers in communities all across the nation. The maximum credit will be nearly tripled, and it will extend eligibility to 17 million more low-income workers under 25 without children. The plan will also make the CDCTC fully refundable, ensuring that working adults in the lowest-income households can afford to stay in work and cover the high costs of childcare.

“The CTC, EITC, and CDCTC are three of the most effective and successful anti-poverty programs available to millions of low- and moderate-income working families in New Jersey and across the country,” said Sen. Menendez. “At a time when millions of families have been hit hard by the ongoing COVID-19 pandemic, these expanded tax credits will be a critical life-line for many hardworking New Jerseyans that are struggling to make ends meet. Now is the time to be big and bold in our actions to ensure that we help lift as many families as possible out of poverty once and for all.”

“In 2018, the EITC lifted 5.6 million people out of poverty, including 3 million children. Under the American Rescue Plan, it is estimated that nearly 10 million children, including 2.3 million Black children and 4.1 Latino children, and 17 million childless workers will be lifted out of poverty. Additionally, it would also make dependent care more affordable, especially for women ages 25 to 44 who are nearly three times as likely as men not to be working due to child care demands during the pandemic.”

 

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