According to the Center on Budget and Policy Priorities, rural communities benefit disproportionately from the American Rescue Plan’s temporary expansions  of the Earned Income Tax Credit (EITC) and Child Tax Credit. However,  the expansions will expire after this year if Congress does not extend  them.
The EITC and Child Tax Credit are powerful anti-poverty tools,  especially in rural (non-metro) communities, but prior to the Rescue  Plan they had two major flaws. The EITC for workers not raising children  in the home was extremely small; as a result, 5.8 million workers aged  19-65 without children (excluding full-time students under 24) were  taxed into or deeper into poverty. And 27 million children — including  roughly half of Black and Latino children and nearly half of children  living in rural areas — received less than the full $2,000-per-child  Child Tax Credit because their parents earned too little, even as  middle- and higher-income families received the full amount.
The American Rescue Plan addressed both of these flaws on a temporary  basis. For tax year 2021, it raised the maximum EITC for workers  without children from roughly $540 to roughly $1,500 and raised the  income cap to qualify from about $16,000 to more than $21,000 for single  and head-of-household filers and from about $22,000 to more than  $27,000 for married couples. It also expanded the age range of eligible  workers without children to include younger adults aged 19-24 (excluding  those under 24 attending school at least part time), as well as people  aged 65 and over.
The Plan also made the full Child Tax Credit available  to children in families with low earnings or who lack earnings in a  given year and increased the maximum credit to $3,000 per child ($3,600  for children under 6). It also extended the credit to 17-year-olds. The  increase in the maximum credit begins to phase out once incomes exceed  $112,500 for heads of households and $150,000 for married couples.
Twenty-one percent of workers without children who live in rural  areas will benefit from the Rescue Plan’s EITC expansion, compared to 17  percent of those in metro areas. (See Table 1.) And 94 percent of  children who live in rural areas will benefit from its Child Tax Credit  expansion, compared to 89 percent of those in metro areas. (See Table  2.) These expansions are critical to households in both rural and metro  areas and should be made permanent.
