The Earned Income Tax Credit and Marriage Penalties: Does a Childless Worker Expansion Make Them Worse?

The earned income tax credit (EITC) is an effective tool to reduce poverty, but it penalizes marriage. Existing research primarily relies on hypothetical situations to document EITC marriage penalties, with little empirical work exploring penalties based on real-life situations. This paper analyzes survey data from low-income parents with young children in urban areas and finds that EITC marriage penalties are more prevalent and larger than marriage bonuses. Expanding the childless worker EITC, as some have proposed, would worsen marriage penalties but by fairly small amounts. If enacted, policymakers should at least match the childless worker EITC expansion with a married family expansion and consider additional steps to reduce the overall EITC marriage penalty.

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