For example, a couple who have two qualifying children and file a joint return, could earn up to $46,044 per year and still qualify for an earned income credit
The federal Earned Income Credit
is another refundable federal income tax credit available to qualifying low-income taxpayers.
The crown jewel of refundable tax credits is the earned income tax credit (EITC) or earned income credit
The credits and head-of-household status are not available to the taxpayer, since the earned income credit
and child tax credit are limited to QCs (and the latter further restricted to QCs under age 17 at the end of the tax year).
Those most common to military taxpayers are the Hope and Lifetime Learning Credit, (50) Adoption Credit, (51) Additional Child Tax Credit, (52) and the Earned Income Credit
To encourage work, the system could also have a $2,000 per worker refundable earned income credit
(computed as 20 percent of the first $10,000 of earned income), and there would be no need to phase out of either the personal tax credits or the worker credits.
After 2004, a single definition will apply for the purposes of the dependency exemption, the child tax credit, the earned income credit
, the dependent care credit and head of household filing status.
Acknowledging these criticisms, Sunstein nevertheless argues in a somewhat Clintonian mode for smarter programs--for example, he favors the earned income credit
over minimum-wage laws.
He notes, for example, "treating an earned income credit
as untaxed income in the formula seems very inequitable when you consider that this tax credit is only available to low-income families.
Other issues include earned income credit
and estimate payments on behalf of a married couple when filing separately.
Quantifying benefits due to testing is difficult, but IRS's experience in revising and testing Earned Income Credit
and Child Tax Credit forms and instructions suggests that benefits of testing in some cases can considerably exceed the cost of testing.
Form 1040A with Schedule 1,2,3 and Earned Income Credit