Federal CTC and EITC

Extending the Earned Income Tax Credit: How the Economic Security Project’s Cost-of-Living Refund Would Affect Family Caregivers

01. 31. 2020

The proposal would extend the maximum credit ($4,000 if single, $8,000 if married) to family caregivers with earnings too low to qualify.

This article originally appeared in the Urban Institute.

In recognition of the important work family caregivers do, Economic Security Project (ESP) has proposed that they be eligible for the cost-of-living refund, an expansion of the earned income tax credit (EITC). Among other changes to the EITC, the cost-of-living refund would extend benefits to family caregivers who have little or no earnings from paid employment, essentially expanding the kinds of work eligible for tax benefits. We estimate the caregiver provisions of the proposal would increase tax benefits for 2.6 million families in 2020. The proposal would provide $2,830 billion in tax benefits over fiscal years 2019–28; extending full benefits to low-income family caregivers would account for about $180 billion of those costs. Benefits from the caregiver provision would be highly concentrated among very low-income families.