Key Tax Credit Legislation is Pending in Congress

By Kate Skochdopole

As Congressional debate continues about whether to extend key Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) provisions in the latest package of tax breaks, several bills are pending in Congress that aim to improve the two credits.

Democrats and Republicans alike – including President Obama and Rep. Paul Ryan (R-WI) – have proposed expanding the EITC for childless workers, but the legislation has stalled in Congress.

Additional proposals include Rep. Barbara Lee’s (D-CA) Pathways out of Poverty Act, which has 38 co-sponsors and would also expand the EITC for workers without qualifying children. “We are continuing to build support for the Pathways Out of Poverty Act which uses proven, evidence-based solutions to create good paying jobs to lift families out of poverty and provide a strong safety net for those still struggling,” Congresswoman Lee told Tax Credits for Working Families. “I would encourage those supporting these goals to make their voices heard.”

Reps. Charles Rangel (D-NY) and Danny Davis (D-IL) and Sen. Patty Murray (D-WA) also introduced 2014 legislation to expand the EITC for childless workers. Rep. Rangel’s EITC for Childless Workers Act of 2014and Rep. Lee’s Pathways proposal go further by lowering the age of eligibility for the credit from 25 to 21, a reform recently encouraged by the Center for American Progress.

Sen. Sherrod Brown (D-OH) introduced the Working Families Tax Relief Act in the Senate in early 2013, and Rep. Richard Neal (D-MA) sponsored a companion House bill soon after, but both must be reintroduced in the 114th Congress to become law. In addition to lowering the age of eligibility, the bills would expand the EITC for childless workers and permanently increase the credit for families with three or more children. The legislation would also make permanent the reduced income threshold for the CTC, one of the key provisions scheduled to expire in 2017.

Rep. Neal’s office reports that he plans to reintroduce the legislation in 2015 and calls these reforms a top political priority. Senator Brown hopes that Congress can unite to make these improvements a reality.

“By strengthening the EITC, and expanding its eligibility to workers without children, we can help create a path to the middle class,” he said in a recent interview with Tax Credits for Working Families. “Making these provisions permanent should be a bipartisan goal.”