Top Democrat: Tax credit expansions must be in next coronavirus relief package

House Ways and Means Committee Chairman Richard Neal (D-Mass.) on Friday said that expansions of the earned income tax credit (EITC) and child tax credit (CTC) — two tax credits aimed at helping low- and middle-income households — must be included in the next coronavirus relief package.

Neal’s comments come amid discussions between House Speaker Nancy Pelosi (D-Calif.) and Treasury Secretary Steven Mnuchin on legislation. The White House did not include expansions of the credits in the proposal it offered last week, which Democrats have cited as a key flaw with the offer.

“The decision to exclude these provisions – including Democrats’ proposal to make some of the benefits available immediately – means that workers and families will miss out on thousands of dollars they need to get back on their feet in the coming months,” Neal said in a statement. “Along with an extension of emergency unemployment compensation into 2021, these anti-poverty tax measures must be in the next stimulus package.”

House Democrats passed a $2.2 trillion relief package earlier this month that would increase the eligibility and amount of the EITC for childless workers for 2020. It also would allow taxpayers to use their 2019 income for purposes of claiming the credit on their 2020 tax returns instead of their 2020 income, which would help to prevent people from receiving a smaller credit this year because they lost their jobs. Additionally, the measure would make the CTC fully refundable for 2020, which would allow the lowest income families to receive the full credit amount.

A broader expansion of the CTC was included in an earlier, larger version of House Democrats’ proposal that passed in May.

The White House’s most recent offer, which has a price tag of about $1.8 trillion, did not include expansions of the EITC and the CTC. Instead, it called for stimulus payments of $1,000 per child, up from the $500 per child proposed in a previous GOP offer and in Democrats’ $2.2 trillion bill.

Neal said the White House proposal “fails to include the robust assistance Americans need to survive the ongoing COVID-19 crisis.”

Pelosi has also repeatedly criticized the Trump administration for not proposing expansions of the EITC and CTC.