Complex Family Structures Could Be Contributing To EITC Error Rate
By Kate Skochdopole
As the number of children born to unmarried parents continues to increase, many non-traditional families are struggling to navigate the complex tax code, which could be contributing to high tax credit error rates.
In a piece out today, NPR’s Yuki Noguchi investigated how households with unmarried parents are trying to make sense of tax regulations, file correct returns, and access the credits and benefits they earn. She found that the path to an accurate return is not an easy one for these non-traditional families. For instance, one low-income filer she interviewed said he spent over ten hours trying to file this year’s return.
When households include multiple dependents and single parents, tax returns become more complicated and errors are likely to happen. American Enterprise Institute scholar Alan Viard said the high error rate for the Earned Income Tax Credit (EITC), one of the most successful antipoverty programs administered through the tax code, could be due in part to the complexities in how non-traditional families are taxed.
“Those improper payments may not be any type of deliberate wrongdoing but simply reflect taxpayers struggling to deal with a complicated sense of rules,” he told NPR.
Antipoverty tax credits like the EITC enjoy broad bipartisan support and the tax code has become an important means to helping low-income families make ends meet. With fewer Americans living in traditional families, the challenges facing low-income filers will likely grow.