by Maurie Backman | Published on July 31, 2021
Many or all of the products here are from our partners. We may earn a commission from offers on this page. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page.
Lower-income households could be in line for more relief if a new bill moves forward.
Ever since the pandemic began, there's been a host of relief available to help Americans get through the ongoing crisis. For one thing, three separate stimulus rounds have hit Americans' bank accounts, the most recent of which was worth up to $1,400. Additionally, unemployment benefits are getting a $300 weekly boost through the beginning of September, and the Child Tax Credit has been expanded to pay parents a lot more money than it previously did.
Now there's a new bill in the works designed to expand a separate tax credit for low-income households. And if it passes, a lot of people could be in for even more relief.
Tips and tricks from the experts delivered straight to your inbox that could help you save thousands of dollars. Sign up now for free access to our Personal Finance Boot Camp.
By submitting your email address, you consent to us sending you money tips along with products and services that we think might interest you. You can unsubscribe at any time. Please read our Privacy Statement and Terms & Conditions.
Last week, Wisconsin Representative Gwen Moore reintroduced the Worker Relief and Credit Reform Act. The bill was first introduced in 2019, and its goal is to expand the Earned Income Tax Credit (EITC), a credit designed for low-income households.
The EITC is a particularly valuable credit because it's fully refundable. Many tax credits are not refundable, which means the most they can do is lower a filer's tax liability to $0. Refundable credits put money in tax filers' pockets even when those filers owe no tax.
Eligibility for the EITC depends on annual income and the number of people in a given household. And for 2021, it's already gotten a generous boost.
This year, the EITC is generally available to filers without qualifying children who are at least 19 years old with earned income below $21,430. That limit rises to $27,380 for spouses filing a joint return. The maximum value of the EITC for filers with no qualifying children is $1,502 this year. However, eligible recipients will have to wait until next spring to see any money from the EITC, and they'll need to file a tax return to get it.
The Worker Relief and Credit Reform Act is seeking to help more people qualify for the EITC. For one thing, it would broaden the income requirements so that couples earning up to $90,000 can qualify. It would also have the credit phase in more quickly, which means lower earners would be eligible for more money. All told, if the proposal goes through, the credit could be worth up to $4,000 per individual or $8,000 per married couple.
Meanwhile, some lawmakers are fighting to have this year's expanded Child Tax Credit made permanent. The now fully refundable credit is currently worth up to $3,600 per child for certain households, whereas it previously maxed out at $2,000 per child and was not fully refundable.
By enhancing these tax credits, lawmakers are hoping to not only help more people recover from the impact of the coronavirus pandemic, but also attain more financial stability in the long run. Even outside of the pandemic, many Americans have struggled to make ends meet, and expanding key tax credits could be the ticket to helping lower-income households stay afloat and cover their expenses.
If you have credit card debt, transferring it to this top balance transfer card secures you a 0% intro APR into 2023! Plus, you’ll pay no annual fee. Those are just a few reasons why our experts rate this card as a top pick to help get control of your debt. Read The Ascent's full review for free and apply in just 2 minutes.
We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.
The Ascent is a Motley Fool service that rates and reviews essential products for your everyday money matters.
Copyright © 2018 - 2021 The Ascent. All rights reserved.