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Lawmakers Set Markers for Expanding Tax Relief During Pandemic

Posted on May 4, 2020

A bipartisan pair of House taxwriters wants coronavirus relief funds to be made available for dependents regardless of their age, while congressional Democrats are also pushing for expanded tax relief.

Legislation introduced May 1 by House Ways and Means Committee members Ron Kind, D-Wis., and Jackie Walorski, R-Ind., would allow all dependents to be eligible for the $500 relief made available through the Coronavirus Aid, Relief, and Economic Security (CARES) Act (P.L. 116-136).

Walorski said in a release that it’s “only fair to include all adult dependents — not just children under the age of 17 — in families’ direct payments.”

The CARES Act limited the availability of the $500-per-child addition to taxpayers’ economic impact payments to dependents under the age of 16, meaning older dependent children and dependent adults, such as college students and those with disabilities, were left out. The new bill would strike the language on qualifying children from the CARES Act and instead define dependents using section 152.

“This legislation will fill in gaps in the CARES Act by expanding eligibility for economic impact payments and take an important step towards providing further relief,” Kind said in the same release.

House Democrats also want workers who lack a Social Security number to receive relief checks. Rep. Joaquin Castro, D-Texas, told reporters on a call May 1 that denying relief to workers who file tax returns using an individual taxpayer identification number is a grave injustice.

Not only are the workers denied relief from the federal government, but their families also don’t receive a check if the household files with an ITIN, Castro said, adding that this has resulted in U.S. citizens not receiving relief during the economic downturn.

The Mexican American Legal Defense and Educational Fund recently filed suit on behalf of six plaintiffs against Treasury Secretary Steven Mnuchin and IRS Commissioner Charles Rettig, alleging that as many as 2 million taxpayers filing returns with an ITIN have been denied relief checks.

Castro said House Democrats lobbied for those taxpayers to be eligible for relief during negotiations over the CARES Act, but they were ultimately excluded. House Speaker Nancy Pelosi, D-Calif., who also spoke on the call, vowed to include relief for immigrant workers in the next coronavirus relief legislation.

Refundable Credit Expansion

Senate Democrats, meanwhile, want to further help low-income households by drastically expanding the earned income tax credit and child tax credit as part of the next coronavirus bill.

In an April 30 letter to Senate Majority Leader Mitch McConnell, R-Ky., and Senate Minority Leader Charles E. Schumer, D-N.Y., a group of 39 Democratic senators said the EITC and child tax credit are proven and effective tools for improving the financial stability of workers and their families. “Expanding them will provide much-needed support to families and boost our economy as our nation recovers from COVID-19,” the letter says.

The letter was spearheaded by Senate Finance Committee members Sherrod Brown, D-Ohio, and Michael F. Bennet, D-Colo., as well as ranking member Ron Wyden, D-Ore., all of whom cosponsored the Working Families Tax Relief Act (S. 1138), which would expand the refundable credits while also creating a new young child tax credit and allowing advance payment of the EITC.

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