Here’s What Could Happen If the EITC is Expanded for Childless Workers

By David Curtiss

There’s been a lot of talk but little action from lawmakers on both sides of the aisle about expanding the Earned Income Tax Credit (EITC) for “childless” workers, the lone group that is taxed into poverty.

While congressional gridlock has stalled legislation to expand the credit, one group of researchers has put the idea to the test. Led by MDRC, the Paycheck Plus pilot program simulates expanding the maximum EITC for workers not raising children from roughly $500 to $2,000 in New York City and Atlanta.

Now, three years after the program began in New York, Paycheck Plus is gearing up to release findings that could help move lawmakers to action. While the full report is due in August, several preliminary results show that expanding the EITC for childless workers is smart policy:

  • Paycheck Plus raised income and employment levels. The average expanded credit totaled about $1,400 per recipient. Specifically in year two of the program, it led to a significant increase in employment among women, and a moderate increase among men.
  • Paycheck Plus boosted the rate of filing taxes and use of free tax preparation, such as Volunteer Income Tax Assistance (VITA). The program also modestly increased the take-up rate of the federal EITC.
  • Paycheck Plus increased payments for child support from noncustodial parents. Paycheck Plus recipients paid an average of $54 per month more in child support than individuals in the control group — a 39 percent increase.

If these early findings reflect what’s to come in the full report, Paycheck Plus will show that expanding the EITC to childless workers is a promising tool for reducing wealth inequality, boosting civic engagement and helping working families make ends meet.