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Income tax returns-Can the country afford this?

Anonymous
Posted by Anonymous
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Taxation and the Family: What is the Earned Income Tax Credit?

The earned income tax credit (EITC) provides a subsidy for low-income working families. The credit equals a fixed percentage of earnings from the first dollar of earnings until the credit reaches a maximum; both the percentage and the maximum credit depend on the number of children in the family. The credit then stays flat at that maximum as earnings continue to rise, but eventually earnings reach a phase-out range. From that point the credit falls with each additional dollar of income until it disappears entirely (figures 1 and 2). The phaseout begins at a higher income for married couples than for single parents. The credit is fully refundable: any excess beyond a family‚Äôs income tax liability is paid as a tax refund.

Taxation-&-Family-Graphs-EITC-Aug-2012
Underlying Data: Download
  • Families with three or more children may receive a credit of up to $5,891 in 2012. The maximum credit is $5,236 for families with two children, $3,169 for families with one child, and just $475 for those without children.
  • Taxation-&-Family-Graphs-Table-Earned-Income-graph4-8-6-11
  • In addition, 23 states and the District of Columbia are administering their own state EITCs in 2010. States typically offer the EITC as a fixed percentage of the federal credit and the EITC is refundable in 19 states and the District of Columbia.
  • After the Supplemental Nutritional Assistance Program (SNAP), the EITC is the largest cash or near cash assistance program targeted at low-income families. An estimated 26 million households received a total of $55 billion in reduced taxes and refunds in 2010 (Urban-Brookings Tax Policy Center Microsimulation Model, version 0411-2). The IRS estimates that in 2009, the credit lifted nearly 7 million people out of poverty, including over 3 million children. The IRS also reports that more than three-fourths of eligible families claimed the Earned Income Tax Credit in 2009, a much higher take-up rate than that for Temporary Assistance to Needy Families (40 percent in 2005) or for SNAP (60 percent in 2005).
    Taxation-&-Family-Graphs-Real-Fed-Spending-graph5-8-6-11
Posted by Anonymous on Jan. 14, 2013 at 6:38 PM
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wymama610
by on Jan. 14, 2013 at 6:41 PM
Nope. It needs to end. You know the saying about good intentions....... EITC does nothing but attempt to redistribute wealth.
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Anonymous
by Anonymous 1 - Original Poster on Jan. 14, 2013 at 6:43 PM


Quoting wymama610:

Nope. It needs to end. You know the saying about good intentions....... EITC does nothing but attempt to redistribute wealth.

It was ORIGINALLY intended for MUCH lower income levels-to offset the regressive nature of payroll taxes, and to make it more worthwhile to work than to collect welfare (as a part of welfare reform in the 1970's) It has mushroomed to 60 BILLION dollars of assistance a year-that is offered to families making as much as 50K a year!

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