Families Earning Below $75,000 A Year Could Have A Tax Rate Of Zero

The $1.9 trillion American Rescue Plan will lower the average individual tax rate to zero or less for families earning $75,000 or less.

According to estimates from the Joint Committee on Taxation, middle-class taxpayers earning $50,000 to $75,000 will have an average tax rate of -1.9%.

Low-income families will get an influx of money back from the IRS because of the expansion of tax credits such as the Child Tax Credit, the federal stimulus, and the Earned Income Tax Credit. The Child Tax Credit and The Earned Income Tax Credit are refundable.

The Institute on Taxation and Economic Policy found that the tax credit programs will provide a 33% boost to the pre-tax incomes of the poorest 20% of Americans.

“The Child Tax Credit expansion will provide important help to people in a myriad of jobs that pay little and often have fluctuating schedules, including people caring for the elderly, driving buses, cooking and serving meals, and doing many other kinds of important work,” an analyst from the Center on Budget and Policy Priorities said.

In July, families with children under the age of 18 will get monthly checks from the IRS for each child. Families will receive $300 per month for each child under 6 and $250 for children between the ages of 6 and 17.

 

 

About RavenH

Raven Haywood is a journalist for 10+ years. Graduate from Howard University.

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