This report was updated in December 2021.

Many households living on low-to-moderate incomes rely on an annual infusion of cash from tax refunds. The employment disruptions of the COVID-19 pandemic made this even more true for 2020, yet major components of the refunds—namely the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC)—were at risk due to calculation formulas penalizing a drop in earned income (unemployment benefits do not count as “earned income” for tax purposes). Millions of households, disproportionately Black and Latinx, could have seen a drop in their refunds up to 80%, totalling as much as thousands of dollars, from their 2019 tax refunds.

Commonwealth, in coalition with SaverLife and Neighborhood Trust, recognized this problem and initiated a Rapid Response Campaign to raise awareness and push for solutions. Shortly after, led by policy advocates in Washington and supported by the Campaign, Congress passed a “lookback” provision, allowing taxpayers to look back to their 2019 earnings in calculating the EITC and Additional Child Tax Credit (ACTC). The campaign then shifted its focus to outreach, increasing awareness among the taxpayers who could benefit from the policy change, and equipping them with the tools to take advantage of it.

This report was completed with the support of JPMorgan Chase & Co., Prudential Foundation, The Rockefeller Foundation, and W.K. Kellogg Foundation.