Expanded refundable tax credits are a targeted and effective way to reduce poverty and support families through the tax code. While the American Rescue Plan Act’s expansions to the Child Tax Credit, Earned Income Tax Credit, and Child and Dependent Care Tax Credit provided substantial relief to families in the depth of the COVID recession, decades of research, bolstered by recent evidence about the impact of the expanded credits in 2021, show the irrefutable benefit of these credits in all economic circumstances, especially for families with low and moderate incomes, families headed by women, and Black and Latinx families. Moreover, expanded refundable tax credits can correct for systemic inequities—especially if combined with robust public investments in the care infrastructure, health care, affordable and accessible housing, and a livable wage.
In short, women and families needed the expanded refundable tax credits before the pandemic, especially benefited from them in 2021 and 2022, and continue to need them today and in the foreseeable future. Policymakers should reduce poverty and support families by expanding refundable tax credits that women and families rely on, following the successful model of the American Rescue Plan Act.
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