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State-by-State Analysis of American Rescue Plan Tax Credits for Families and Workers

March 8, 2022

Today, the White House released a new state-by-state analysis of the historic tax relief for working families in President Biden’s American Rescue Plan (ARP), which is helping lower costs for families and workers. Thanks to ARP, Americans have received the largest ever Child Tax Credit, the largest ever Earned Income Tax Credit for workers without dependent children, and the largest ever Child and Dependent Care Tax Credit – which will help families meet the high costs of care.

The American Rescue Plan:

Expanded Child Tax Credit for Working Families – Helping Deliver Record Lows in Child Poverty.

  • The 2021 CTC will reach a record nearly 40 million families with 65 million children.
  • Expanded $3,000 credit for kids age 6-17 and $3,600 for kids under 6
  • Experts estimate that the Child Tax Credit was the main driver in the American Rescue Plan bringing child poverty to record lows in 2021– including record low Black and Hispanic child poverty.

Expanded Earned Income Tax Credit for Workers

  • Tripled EITC for 17 million workers without dependent children from $540 to $1500 – the first increase since 1993 – and extended the credit to younger & older workers.
  • Helping millions of front-line workers: This expansion will help nearly 1.8 million cashiers and retail salespeople; almost 1 million cooks and food prep workers; and more than 850,000 nurses and health aides, 500,000 janitors, 400,000 truck and delivery drivers, and 300,000 childcare workers.

Delivered a historic increase in the Child and Dependent Care Tax Credit to support millions of working families this tax season

  • ARP increased maximum CDCTC by more than 6 times to up to $8,000 towards child care expenses in 2021 for a median-income family with two children under age 13 (compared with a maximum of $1,200 in 2020).
  • Will reimburse most families for up to half of their child care expenses (was only up to 20 percent of expenses in 2020 for most families)
  • First time fully refundable, making the credit fairer regardless of taxes owed.

 

Factsheets by State/Territory: