New Legislation Seeks to Save Key EITC and CTC Provisions

By Lauren Pescatore

New Senate legislation offers hope for the nearly 50 million Americans who face a tax increase if key provisions of the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) are allowed to expire at the end of 2017.

The TRAFFIC Relief Act, introduced last week by Senator Tom Carper (D-Del.), would make permanent certain EITC and CTC improvements put in place by the 2009 American Recovery and Reinvestment Act (ARRA). Those improvements include a lower income threshold for the CTC, EITC “marriage-penalty” relief and a larger EITC for parents of more than two children.

The Center on Budget and Policy Priorities reports that nearly 50 million Americans, including 25 million children, would lose all or part of their EITC or CTC if these provisions are not preserved.

Sen. Carper’s legislation not only saves these vital improvements, it goes further by also indexing the CTC to inflation and expanding the EITC for childless workers – a group too often overlooked by tax code benefits. The TRAFFIC Relief Act proposes an increased fuel tax to help pay for the expanded credits as well as transportation investments across the country. The EITC and CTC improvements will help “ensure that American families receive expanded tax relief to help balance the gradual increase in the gas tax,” says Sen. Carper.

Both the House and Senate have already passed a number of bills to make tax breaks for businesses permanent as part of a “tax extenders” package. It’s only fair that help also be given to struggling workers and their families by making permanent key EITC and CTC provisions and shielding them from a tax increase.