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1 1 (March 1, 2021)

handle is hein.crs/goveckr0001 and id is 1 raw text is: Con ressional SResearch Service The Childless EITC: Summary of Current Law and Proposed Expansion in the American Rescue Plan Act of 2021 (ARPA; H.R. 1319) Updated March 1, 2021 The earned income tax credit (EITC) is the largest need-tested antipoverty program that provides cash to families. Workers with qualifying children-that is, dependent children who live with the taxpayer for more than half the year-receive the majority of EITC benefits. For 2018, 26.5 million taxpayers received a total of $64.9 billion from the EITC. Of that total, there were 6.9 million recipients without qualifying children (about 26% of the total) who received $2.1 billion (about 3% of the total dollars), receiving an average credit of $302. This Insight provides an overview of the current EITC for workers without qualifying children at home, often called the childless EITC. The term childless, however, may be misleading. Workers without qualifying children may have noncustodial children, live with children for less than six months of a year, or live with nonbiological children they cannot claim for the credit. This Insight also summarizes a proposal to expand the childless EITC that was included in the American Rescue Plan Act of 2021 (ARPA; HR. 1319), which passed the House on February 27, 2021. What is the EITC? The EITC is a refundable tax credit available to low-income workers. Like all tax credits, the EITC can reduce income tax liability. Since the EITC is a refundable tax credit, if a taxpayer's EITC is greater than what they owe in income taxes, they can receive the difference (the portion of the credit that remains after offsetting any income tax liability, often referred to as the refundable portion of the credit) as a tax refund. This means that low-income taxpayers, who often have little to no income tax liability, can receive the full amount of the credit. The EITC is received once ayear as a lump-sum payment when households file their federal income tax returns. Calculating the EITC A taxpayer's EITC is based on a formula that considers earned income, number of qualifying children, marital status, and adjusted gross income (AGI). Under this formula, the EITC increases in value as Congressional Research Service https://crsreports.congress.gov IN11610 CRS INSIGHT Prepared for Membersand Committeesof Congress

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