H.R.3157: Working Families Tax Relief Act of 2019

Overview

The Working Families Tax Relief Act (H.R. 3157/S. 1138) would expand the Earned Income Tax Credit (EITC) by increasing the initial credit percentage, phaseout percentage, and income threshold for phaseout:

The bill would increase the credit percentage for an individual with: |
• 1 qualifying child from 34% to 42.5%; |
• 2 qualifying children from 40% to 50%; |
• 3 or more qualifying children from 45% to 52%; and|
• No qualifying children from 7.65% to 20%.|

It would also increase the phaseout percentage for an individual with no qualifying children from 7.65% to 15.98%.|

Additionally, the legislation would increase the phaseout income ranges for an individual with:
• 1 qualifying child from $6,330—$11,610 to $10,180—$18,660; |
• 2 or more qualifying children from $8,890—$11,610 to $14,290—$18,660; and |
• No qualifying children from $4,220—$5,280 to $10,180—$11,380. |

The bill would also increase the phaseout amount for joint filers from an increase of $5,000 to an increase of $5,690.|

H.R. 3157 would lower the eligibility age for the EITC from 25 to 19 and increase the maximum eligibility age from 65 to 68 and update the inflation adjustment to more current inflation data and allow for a partial advance lump sum payment of the EITC after six months of employment.

The Working Families Tax Relief Act aims to significantly expand the child tax credit (CTC) to increase the allowable credit amount from $1,000 to $2,000 and make it fully refundable, as well as increase the credit for children under six to $3,000.|Additionally, it would change the the eligibility threshold:|
• For joint returns from $110,000 to $200,000;|
• For an individual who is not married from $75,000 to $150,000; and|
• For a married individual filing a separate return from $55,000 to $100,000.

View Full Overview

Talking Points

  • Based on an analysis of Census data, the proposal, known as the Working Families Tax Relief Act, would improve the economic well-being of 46 million low- and moderate-income households with 114 million people.
  • A significant body of research indicates that the EITC and CTC increase employment, reduce poverty, and improve children’s life prospects. The proposal’s EITC and CTC expansions — combined with overdue legislation to raise the minimum wage, provide paid family and medical leave, and other such policies — would help address the long-term wage stagnation that has affected households from all racial and ethnic backgrounds that earn low or modest wages.
  • The legislation would expand the EITC by roughly 25 percent for families with children. It also would substantially strengthen the very small EITC for workers who aren’t raising children in their homes — the sole group that the federal tax code now taxes into, or deeper into, poverty. The bill’s EITC expansions would, by themselves, benefit an estimated 35 million households with 75 million people.
  • The bill also would make the CTC fully refundable so children in lower-income households, including those with little or no income, could benefit fully from it. Today, the CTC provides little or no help to millions of children and families with low incomes — the people who need it most.
  • The bill’s CTC changes would benefit an estimated 43 million children, lifting more than 10 million of them above or closer to the poverty line. Its impact on deep poverty among children — that is, on children who live below half of the poverty line — would be dramatic.
  • Taking its EITC and CTC expansions together, the bill would boost the incomes of an estimated 24 million white families, nine million Latino families, eight million Black families, and two million Asian American families. It would lift 29 million people above or closer to the poverty line, including 11 million children.[1] The child poverty rate would fall from 15 percent to 11 percent (a 28 percent decline), using the Supplemental Poverty Measure (or SPM, which most analysts view as more accurate than the official poverty measure and which counts refundable tax credits as income). The overall SPM poverty rate would decline from 14 percent to 12 percent.
  • Source: https://www.cbpp.org/research/federal-tax/working-families-tax-relief-act-would-raise-incomes-of-46-million-households

Our Stance

Support

Priority

Medium

Bill Number

H.R.3157

Date Introduced

June 06, 2019

Committee

House Natural Resources Committee

Bill Status

Introduced or Prefiled

Assigned Contact

Roxy Caines
Get It Back Campaign Director
Center on Budget and Policy Priorities
820 First Street Northeast
Washington DC , 20002
202-408-1080