The Earned Income Tax Credit (EITC) in the Senate Finance Committee Text of the Build Back Better Act: Summary Table
INSIGHTi
The Earned Income Tax Credit (EITC) in the
Senate Finance Committee Text of the Build
Back Better Act: Summary Table
December 13, 2021
On December 11, 2021, the Senate Finance Committee released updated text of the committee’s
provisions in the Build Back Better Act (BBBA; H.R. 5376). This updated text of the BBBA would
extend the 2021 expansion of the earned income tax credit (EITC) for taxpayers without qualifying
children for one year—2022. The EITC for taxpayers with qualifying children generally would not be
modified by BBBA.
With respect to the EITC provisions, the updated Finance Committee text is identical to the House-passed
BBBA.
The EITC for taxpayers without qualifying children is sometimes referred to as the “childless” EITC. The
term “childless,” however, may be misleading. While childless EITC recipients include those who do not
have any children, they may also include workers who do have children, but not children that the taxpayer
can claim for the EITC (e.g., they may have noncustodial children, live with children for less than six
months of a year, or live with nonbiological children they cannot claim for the credit).
The EITC was only available to low-income workers with qualifying children when it was enacted in the
mid-1970s. The credit was expanded to include taxpayers without qualifying children in 1993 as part of
the Omnibus Budget Reconciliation Act of 1993 (OBRA93, P.L. 103-66) to partly offset a gasoline tax
increase included in the law. Prior to 2021, the childless EITC parameters had not been statutorily
modified since OBRA93 (they are annually adjusted for inflation). In March 2021, the American Rescue
Plan Act (ARPA, P.L. 117-2) temporarily expanded the childless EITC for one year—2021—by
increasing the credit amount (with adjustments to the credit formula) and expanding eligibility to both
younger and older workers without qualifying children.
The childless EITC changes included in the updated Senate Finance Committee text (and House-passed
BBBA) differ from those included in the legislation when it was initially reported by the House Budget
Committee on September 27, 2021. Specifically, under the House Budget Committee bill, the ARPA
expansion of the childless EITC would have been made permanent. Under the updated Senate Finance
Committee text (and House-passed version of the BBBA), the ARPA expansion was temporarily extended
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for one year—2022. The Joint Committee on Taxation (JCT) estimated that a permanent extension of
these changes would cost $135 billion over a 10-year budgetary window (FY2022-FY2031). JCT
estimated a temporary one-year extension of these changes in the House-passed BBBA would cost $13
billion over the same time period (mostly incurred in FY2023, when most 2022 income tax returns will be
filed).
Major changes to the childless EITC made by the updated Senate Finance Committee text of the BBBA
are summarized below in Table 1. Table 1 is not a comprehensive accounting of every change included in
the updated Senate Finance Committee text of the BBBA, nor does it include specific details for every
proposed change. The figure following the table illustrates the credit amount by income under current law
and the BBBA.
Table 1. Selected Parameters of the Childless EITC
Under the December 11 Updated Senate Finance Committee Text of the Build Back Better Act (H.R. 5376)
CURRENT LAW
PROPOSED UNDER BBBA
Before & After 2021
2021
2022
After 2022
permanent law, before
permanent law, as
ARPAa
amended by ARPA
Parameter
(a)
(b)
(c)
(d)
Maximum
$543
$1,502
Same as 2021 (b)
Reverts to pre-ARPA
Credit
adjusted for inflation
adjusted for inflation
adjusted for inflation
permanent law, as
Amount
scheduled (a)
adjusted for inflation
Income Range
$0-$7,100 MFJ
$0-$9,820 MFJ
Same as 2021 (b)
over Which
$0-$7,100 HOH
$0-$9,820 HOH
adjusted for inflation
Credit Phases
in
$0-$7,100 S
$0-$9,820 S
MFJ: married
filing jointly
HOH: head of
household
S: Single
Phase-in Rate
7.65%
15.3%
Same as 2021 (b)
Income Range
$7,100-$14,820 MFJ
$9,820-$17,560 MFJ
Same as 2021 (b)
over Which
$7,100-$8,880 HOH
$9,820-$11,610 HOH
adjusted for inflation
Credit
Plateaus at
$7,100-$8,880 S
$9,820-$11,610 S
Maximum
Income Range
$14,820-$21,920 MFJ
$17,560-$27,380 MFJ
Same as 2021 (b)
over Which
$8,880-$15,980 HOH
$11,610-$21,430 HOH
adjusted for inflation
Credit Phases
Out
$8,880-$15,980 S
$11,610-$21,430 S
Phaseout Rate
7.65%
15.3%
Same as 2021 (b)
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CURRENT LAW
PROPOSED UNDER BBBA
Before & After 2021
2021
2022
After 2022
permanent law, before
permanent law, as
ARPAa
amended by ARPA
Parameter
(a)
(b)
(c)
(d)
Income
No
Yes, if a taxpayer’s
Yes. Under this
Lookback for
earned income at the
provision, if a
Phaseout
end of 2021 is less than
taxpayer's earned
their 2019 earned
income in 2022 was
income, the taxpayer
less than their
can elect to use their
earned income in
2019 earned income
2021, the taxpayer
instead of their 2021
could elect to use
earned income in
their 2021 earned
calculating their EITC.
income instead of
their 2022 earned
income in
calculating their
EITC.
Note: Applies to both
Note: Applies to
those with and without
both those with and
qualifying children.
without qualifying
children.
ID
Work-authorized SSN
Work-authorized SSN
Work-authorized
Requirement
SSN
of Taxpayers
Minimum
25
19 for most workers
Same as 2021 (b)
Eligibility Age
24 for part-time
for Qualifying
students
“Childless”
Workersb
18 for former foster
youth and homeless
youth
Maximum
64
Eliminated (i.e.,
Same as 2021 (b)
Eligibility Age
workers age 65 and
for Qualifying
older are eligible)
“Childless”
Workersb
Method of
Credit claimed on tax
Credit claimed on tax
Credit claimed on
Receipt
return
return
tax return
Source: CRS analysis of the Build Back Better Act (BBBA), updated text released by the Senate Finance Committee on
December 11, 2021, Internal Revenue Code Section 32, IRS Revenue Procedure 20-45, and IRS Revenue Procedure 21-23.
Notes: The updated Senate Finance Committee text of the BBBA would permanently provide additional funding for
territorial governments to cover administrative expenses of their territorial EITCs—up to $4 mil ion per year for Puerto
Rico and up to $200,000 per year for the other territories—beginning in 2022.
a. The dol ar amounts in this column reflect the amounts in 2021 before ARPA and can be found in IRS Revenue
Procedure 20-45. Under current law, beginning in 2022, these amounts would again be in effect, but would be
adjusted upward for inflation.
b. An individual’s age for the purposes of these age limits is based on their age on the last day of the year.
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Author Information
Margot L. Crandall-Hollick
Specialist in Public Finance
Disclaimer
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