Infographic: A More Equitable EITC for Childless Workers

By Lauren Pescatore

ChildlessWorkersInfographicThere’s no denying the research. The Earned Income Tax Credit (EITC) is one of the most powerful tools we have to help keep low-wage workers and their families out of poverty. But the EITC does very little to help one specific group of low-wage individuals: “childless” workers, or those without dependent children.

Currently, a single mother of three earning $12,000 per year can receive an EITC of up to $5,411. Comparatively, a single woman without dependent children earning the same amount is only eligible for an EITC of up to $214. Many other low-wage workers without children aren’t eligible for the credit at all. Our latest infographic illustrates who is considered a “childless worker” by federal tax code standards. They include young adults just starting out in the workforce, parents who are unable to claim their children as dependents and members of the military, many of whom have yet to start a family.

According to the Center on Budget and Policy Priorities (CBPP), workers without dependent children comprise the only group currently taxed into or deeper into poverty by our federal tax system, largely because they owe a significant amount in payroll and income taxes but are excluded from receiving the EITC or are only eligible for a very small credit. Strengthening the EITC for these workers would not only help to prevent poverty and build pathways to financial stability, but also could help to boost labor force participation, encourage marriage and reduce incarceration rates.

Expanding the EITC for childless workers has garnered widespread bipartisan support from policymakers at both the state and federal levels. President Obama, House Speaker Paul Ryan, Senator Sherrod Brown and Rep. Richard Neal have all advanced proposals that would lower the EITC’s eligibility age, increase the phase-in rate for workers without dependent children and boost the maximum credit. CBPP reports that 13 million workers would benefit from the Obama and Ryan proposals and an additional 3 million workers — 16.2 million overall — would benefit from the Brown-Neal proposal. The Obama and Ryan proposals would reduce the number of childless workers taxed into or deeper into poverty by about 5.8 million, while the Brown-Neal proposal would prevent about 6.8 million childless workers from being taxed into or deeper into poverty. Strengthening the EITC for these individuals is a vital step in ensuring that our federal tax code is working for workers, not against them.