Earned Income Tax Credit

Home Introduction Why We Need Family Benefits The Major Problems Fixing Family Benefits Two Tiers of Welfare Marriage Penalties Marginal Tax Rates Asinine Asset Tests Administrative Burdens Over-Reliance on Tax Code

Programs

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The Child Tax Credit The Earned Income Tax
Credit The Head of Household
Filing Status The Child & Dependent
Care Credit SNAP (Food Stamps) Temporary Assistance for
Needy Families WIC Medicaid & CHIP

Bills

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Family Security Act Build Back Better Act Working Families Tax
Relief Act End Child Poverty Act SSI Restoration Act

I am a who has .

I have an income of $20,000:

Your EITC is worth $3,995

Chart by @jaydavidmartin1
CC BY 4.0

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Highlights

The head of household filing status is a family benefit for single parents who pay for more than half of their household expenses. It provides a larger standard deduction and preferential tax rates.

Yes, poor families are excluded from benefits. The HOH filing status does not provide any benefit to single parents who make less than the single standard deduction ($12,950 in 2022). When considered in conjunction with the child tax credit, HOH provides no benefit to single parents with one child with an income below $18,950, to single parents with two children with an income below $24,662, and to single parents with three children with an income below $29,662 (see "How do tax credits affect HOH?"). Furthermore, benefits for working class people are substantially smaller than those for parents with higher incomes (see "Is HOH regressive?").

Yes. When a head of household marries a singler filer or another head of household, the amount of tax they owe as joint filers is generally going to be higher than the sum of their individual taxes when they were not married.

Highlights

The head of household filing status is a family benefit for single parents who pay for more than half of their household expenses. It provides a larger standard deduction and preferential tax rates.

	Single Filer/HOH	Married
Childless	$0	$322
One Children	$3,995	$3,995
Two Children	$6,604	$6,604
Three+ Children	$7,430	$7,430

Notes

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References

Crandall-Hollick, Margot L.; Boyle, Connor F.; Falk, Gene (January 21, 2021). "The Earned Income Tax Credit (EITC): How It Works and Who Receives It" . Congressional Research Service. Archived from the original on June 14, 2022.
Crandall-Hollick, Margot L. (April 28, 2022). "The Earned Income Tax Credit (EITC): Legislative History" . Congressional Research Service. Archived from the original on June 8, 2022.
Crandall-Hollick, Margot L. (April 23, 2018). "The Earned Income Tax Credit (EITC): Administrative and Compliance Challenges" . Congressional Research Service. Archived from the original on May 21, 2022.
Crandall-Hollick, Margot L.; Hughes, Joseph S. (August 13, 2018). "The Earned Income Tax Credit (EITC): An Economic Analysis" . Congressional Research Service. Archived from the original on December 16, 2022.
Crandall-Hollick, Margot L.; Landers, Patrick A. (January 24, 2022). "The Expanded Childless EITC and Marriage Penalties" . Congressional Research Service. Archived from the original on January 24, 2022.
Crandall-Hollick, Margot L. (May 3, 2021). "The 'Childless' EITC: Temporary Expansion for 2021 Under the American Rescue Plan Act of 2021 (ARPA; P.L. 117-2)" . Congressional Research Service. Archived from the original on January 11, 2023.
McCabe, Joshua (January 20, 2021). "Misunderstanding Refundable Tax Credits". Niskanen Center. Archived from the original on December 6, 2022.
Meyer, Bruce D. (2010). "The Effects of the Earned Income Tax Credit and Recent Reforms" . Tax Policy and the Economy. 24 (1): 153–180. National Bureau of Economic Research Archived from the original on January 16, 2023. DOI: 10.1086/649831.

Earned Income Tax Credit (2023)

What is the Earned Income Tax Credit?

The EITC Excludes Poor Families

The EITC Creates Marriage Penalties

The EITC Creates Marriage Penalties

The EITC Is Needlessly Complicated

The EITC Is Needlessly Complicated

The EITC Contributes to High Marginal Tax Rates on Working Class Families

Tax Credits are Not as Effective as Direct Spending

Solution 1: A Simplified EITC

Solution 2: The Standard Credit

Notes

References

Two Tiers of Welfare	Marriage Penalties
Marginal Tax Rates	Asinine Asset Tests
Administrative Burdens	Over-Reliance on Tax Code

Child Tax Credit	Earned Income Tax Credit
Head of Household	CDCC
SNAP (Food Stamps)	TANF
WIC	Medicaid & CHIP

Family Security Act	Build Back Better
Working Families Tax Relief Act	End Child Poverty Act
SSI Restoration Act