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1 1 (June 18, 2019)

handle is hein.crs/govbaff0001 and id is 1 raw text is: Congressional Research Service The Earned Income Tax Credit (EITC) for Childless Workers June 18, 2019 The Earned Income Tax Credit (EITC) is a refundable tax credit available to eligible workers. Because the credit is refundable, a worker need not owe federal income taxes to benefit from it. The EITC is the nation's largest cash anti-poverty program, with atax year 2016 (returns filed in 2017) total of $66.7 billion claimed on 27.4 million tax returns. Most of the claimed EITC dollars-$64.7 billion, or 97% of total EITC dollars-were for taxpayers with children compared to $2.1 billion in claimed EITC for taxpayers with no qualifying children. EITC Rules for Childless Workers Compared to Those with Children To claim an EITC, tax filers must (1) file a federal tax return, (2) have earned income, (3) meet the residency requirement, (4) have investment income below a certain threshold, (5) not have had a disallowed credit due to fraud or reckless disregard of the rules when previously claiming an EITC, and (6) provide a Social Security number for themselves and their spouses. In addition to these rules, a taxpayer without a qualifying child must also be between the ages of 25 and 64. A childless worker cannot claim an EITC if he or she can also be claimed for EITC purposes as a dependent on another person's tax return (e.g., a college student). The EITC is a function of a taxpayer's earnings as well as the credit's phase-in or phase-out rate (which rate applies depends on the taxpayer's earnings). The amount of the EITC phases in as earnings increase, with earnings multiplied by the phase-in credit rate. The credit hits a maximum amount, plateaus (meaning the credit amount stays the same even as income rises), and is then phased-out as earnings exceeds certain thresholds. This phase-in, plateau at the maximum, and phase-out is often visually represented as a trapezoid. EITC credit amounts are lower for childless workers than for those with children. For 2019, the maximum EITC for a childless worker is $529 (Table 1). This compares with $3,526 for a tax filer with one child and $6,557 for a tax filer with three or more children. The maximum income levels below which taxpayers are eligible for an EITC is also lower for childless workers-in 2019, EITCs is fully phased out (the EITC amount is $0) once income reaches $15,570 for a single childless worker and $21,370 for married childless workers. For a single filer with one child, the EITC is fully phased out once income reaches $41,094. The income at which the EITC is fully phased out is higher for taxpayers filing joint Congressional Research Service https://crsreports.congress.gov IN11134 CRS INSIGHT Prepared for Members and Committees of Congress

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