Millions of people are working hard and still struggle to make ends meet. Working families living in poverty need immediate relief and ongoing support. The Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC) put money back into the pockets of families with low income, which helps them buy groceries, pay utility bills, and buy school supplies today—and helps them create opportunities for the next generation by accessing additional education and training, securing reliable transportation, and saving for their children’s education. With the passage of the American Rescue Plan Act (ARPA), significant funding is coming to families in communities across this country.
Key Impacts of the Expanded CTC & EITC:
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- Expansions of the federal Child Tax Credit have the potential to reduce child poverty by 50%.
- Reducing the age of eligibility for the federal EITC for workers not raising children to 19 would deliver about $1.3 billion in benefits to 3.5 million workers in 2021. Eliminating the older age limit would deliver an additional $1.0 billion in benefits in 2021, benefiting about 2.8 million workers age 65 and older.
- 17.5 million workers not raising children will benefit each year from the expanded credit amount available in the federal EITC.
What is the EITC? And, why are tax credit important for low & moderate income individuals and families?
Click to learn more about the EITC & tax credits.
What were the changes to the federal CTC and EITC?
With the passage of the American Rescue Plan Act, dramatic expansions and improvemetnes were made to both the federal CTC and EITC.
Learn About the Impact of Tax Credits on Families and Communities
Read about the impact of tax credits on poverty reduction and improved health and education outcomes.
How Can Philanthropy Help?
Learn About Tax Credits for Workers and Families
- About the EITC & Tax Credits (EITC FN)
- What the Earned Income Tax Credit Means for Young Workers (Young Invincibles)
Help Workers and Families Find Free Tax Preparation Services
- Find locations for free tax preparation (IRS)
- My Free Taxes (opens in January 2022)
Raise Awareness
- Toolkit developed by the Get It Back Campaign (CBPP)
- Get It Back Campaign CTC/EITC Resources Page (CBPP)
- EITC Flyer and Postcard (AARP)
- How to access tax credit benefits general overview (National Women’s Law Center)
- IRS EITC landing page with logs of info, graphics, etc (updated forthcoming; 2021 tax season link)
- Using Child Tax Credit Data in your Outreach — webinar (CBPP)
Share the Stories of Workers and Families
Toolkit for Building Power Through Personal Stories (The ARC)
Share These EITC FN Handouts with your Network
Connecting Policy and Grassroots Efforts Worksheet
Improving Economic Security Through Tax Credits
Sample Strategies for Foundations
Given the state of our economy, the economic impact of the pandemic and systemic racial and gender inequity, this is an especially important time for funders to engage community partners in raising awareness of these benefits and the tax credit expansion. While some families received the CTC automatically in the fall, the hardest to reach families – those who do not usually file taxes, have complex family situations, are in mixed immigration status households – may not know about or how to access these potentially life-changing benefits. And all workers and families will need to file taxes in early 2022 to ensure there are receiving the full amount of EITC and CTC benefits.
Support Outreach and Enrollment
Given the importance of the very recent (March 2021) expansion of federal EITC and CTC, many families will not know they are eligible and will not fill out needed paperwork to receive the credits. In the near-term, we need to focus on targeted outreach and engagement strategies.
- Increase Awareness Among Trusted Messengers- Support outreach and awareness efforts, especially those that are building cross-issue bridges.For example: between early childhood providers, diaper banks, homeless shelters, health care providers, immigrant service providers, faith-based groups, or food banks and those working on tax credit awareness.
- Sample Strategy: Identify grantee partners serving hardest to reach members of your community and make sure they are aware of and have access to outreach materials and are developing an outreach strategy.
- Build on Successful Outreach Infrastructure- Identify your existing outreach infrastructure and support enhanced capacity for those key partners to engage in outreach and assistance efforts.
- Sample Strategy: Re-energize your Census Complete Count Committee (or voter registration, ACA enrollment coalition, etc.) to build on successful efforts to reach the hardest-to-reach communities. Get that group back together to develop a “Complete Outreach” plan.
- Build Capacity of Helpers and Navigators. Helping families enroll is a critical element of success. This can take the form of ensuring that trusted messengers know how to access the enrollment portal and can trouble-shoot basic questions and/or connect community members to national systems of technical support.
- Sample Strategy: Identify where community members most likely to be non-filers go for information (for example, a mutual aid organization serving refugee and immigrant communities) and ensure that these front-line helpers have the information and training necessary to answer basic questions and get additional help for families wanting to enroll.
Encourage Storytelling to Support Outreach and Secure Expansions
Critical to the success of any on-the-ground outreach effort is word of mouth, especially testimony from peers. Supporting families receiving the CTC and EITC to tell their own stories, as well as gathering and sharing these stories, can help break down barriers among families who are not yet enrolled. Amplifying the story of how these credits improve family economic security can also bolster efforts to ensure the expansions and improvements are made permanent.
- Support Data and Story Collection- While some grantee partners have already built this capacity, additional resources may be necessary to help community partners gather stories and prepare communications materials that highlight family experience.
- Sample Strategy: Provide funding for grantee partners to bolster their communications capacity to gather and elevate the stories of families receiving the CTC and EITC to local media and opinion leaders.
Prepare for Tax Time
While families are receiving the advanced CTC now, they will need to reconcile the credits received as part of their tax filing in early 2022. Further, the EITC expansions in the ARPA will come at tax time 2022. More families than ever will need help getting their taxes done in high-quality, free, and non-predatory settings.
- Build Capacity Among Free Tax Preparation Efforts- Identify who among your partners provides tax preparation services and engage in a conversation about gaps and needs.
- Sample Strategy: Convene grantee partners and other community partners to develop a tax preparation asset and needs map for your area. Support them develop a strategy to expand access and fill gaps in service, building on the outreach efforts that helped to connect families to the credits.
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