More than 57% of American families paid nothing in federal income taxes last year when adjusted for government entitlements like COVID relief checks, child tax credits, and other payments.
More than half of American households paid no federal income tax last year due to Covid-relief funds, tax credits and stimulus, according to a new report.
The nonpartisan Tax Policy Center estimates that 57% of U.S. households paid no federal income taxes for 2021, up substantially from the 44% before the pandemic.
Howard Gleckman, senior fellow at the Tax Policy Center, said Covid-related job losses, a decline in incomes, stimulus checks and tax credits were largely responsible for the increase.
The expanded Child Tax Credit was a large factor. It substantially reduced “the income tax liability of more than a hundred million households and temporarily turned many from payers of small amounts of federal income tax to non-payers,” Gleckman wrote.