Full Citation
Title: Expanding the EITC for Workers without Resident Children
Citation Type: Miscellaneous
Publication Year: 2019
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Abstract: The federal earned income tax credit (EITC) is a refundable tax credit that provides substantial benefits to low-income working families with children at home but little to those without resident children. But families without resident children also struggle, including noncustodial parents, who are often considered "childless" for tax purposes. We model a plan that would increase the maximum childless EITC to almost half the size of the maximum EITC for one-child families and that would begin to phase the childless EITC out at the same income level used for families with children. This would improve parity between people with and without children at home, filling a gap in existing credit benefits. It could also improve noncustodial parents' economic well-being and increase their capacity to support their children. The federal EITC delivered about $66 billion in benefits to 27 million families in the 2016 tax year (the latest year for which data are available). Workers with children at home received 97 percent of the aggregate benefits. Childless workers receive few benefits from the credit because the maximum credit they can qualify for is relatively small and their credit phases out at much lower income levels than the credit for workers with children. On average, childless workers in 2016 received less than $300 from the EITC, compared with $2,400 for workers with one child at home, $3,800 for workers with two children at home, and $4,100 for workers with at least three children at home. 1 In some cases, "childless" workers have children, but their children live primarily with another parent or are too old to be considered qualifying children for tax purposes.
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Authors: Maag, Elaine; Werner, Kevin; Wheaton, Laura
Publisher: Urban Institute
Data Collections: IPUMS USA
Topics: Labor Force and Occupational Structure
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