Washington, DC – U.S. Senator Sheldon Whitehouse (D-RI), Chairman of the Subcommittee on Taxation and IRS Oversight, today offered examples of how historic expansions of the Earned Income Tax Credit and the Child Tax Credit included in the American Rescue Plan are poised to lift up hundreds of thousands of Rhode Islanders. The American Rescue Plan, signed into law by President Biden this afternoon, is the exact opposite of the Republican $1.9 trillion tax giveaway in whom it helps.
“The American Rescue Plan is the biggest thing to happen to make life better for working Rhode Islanders in decades,” said Whitehouse. “When Republicans were in charge of Congress, their first order of business was passing a tax bill that made rich people richer. Our focus is on helping people who actually need it, and making a real dent in the persistent inequality that was worsened by that tax bill. After a challenging year of lockdowns and economic disaster, we are marshalling the full power of the federal government to lift up Rhode Island families and get an entire generation of kids off to a strong, stable start.”
The American Rescue Plan makes the Child Tax Credit (CTC) a cash payment, increases it to $3,000 ($3,600 for children under six), and provides advanced payment of the credit. In Rhode Island, 185,000 children are estimated to benefit from the CTC expansion. The bill also strengthens the Earned Income Tax Credit (EITC), as much as triple for some workers, and extends it to workers under 25 without children — about 48,000 Rhode Islanders.
The bill makes the Child and Dependent Care Tax Credit a cash payment for half of care costs up to $4,000 for one child and $8,000 for two or more children. The changes apply to the 2021 tax year.
