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    Tax credit changes and expansions in the American Rescue Plan to address childhood poverty amid COVID-19

    Homelessness Policy Research Institute

    Year: 2021

    Prior to the COVID-19 pandemic, the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) combined lifted 5.5 million children out of poverty each year, more than any other program. The COVID-19 pandemic has created economic hardships that place families with children at a higher risk of rent burden, hunger, and homelessness. The June 2021 Census Pulse Survey showed that one-in-eight adults with children lacked sufficient food over the last seven days and one-in-five renters with children were behind on rent. Black renters were even more vulnerable, with 27% of adult renters indicating they were behind on rent. The American Rescue Plan, passed in January of 2021, was an ambitious injection of funding into the American economy to help the country recover from the effects of COVID19. The plan includes significant spending on families and children, including expansions of the Earned Income Tax Credit (EITC), the Child Tax Credit, and revisions to the Affordable Care Act. These policies could help to ease much of the economic burden felt by families and lessen or eliminate inflows into homelessness. This brief will detail the components of the American Rescue Plan that contribute to stabilizing families and summarize previous research into these tax credits and programs.

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