Variations in Earned Income Tax Credit Allocation between the Program’s Eight Qualifying Categories

Abstract The Earned Income Tax Credit (EITC) has been an important anti-poverty program over the past five decades. Research shows that the EITC improves social and health outcomes. However, eligibility is not equitably allocated across the tax credit’s eight qualifying groups. This study examined this inequity while highlighting how it reflects and reproduces socially embedded deservedness narratives. The study investigated the federal poverty threshold (FPT) and EITC phase-out threshold data from 1994 to 2022. We assessed disparities in EITC disbursement amounts by exploring the percentage of EITC phase-out threshold relative to FPT differences between groups. The percentage showed how much a household’s income can exceed their FPT while still qualifying for the EITC. Over the study period, three of the eight EITC qualifying categories that included children were each eligible to receive an average greater than 200% (i.e., two times) their corresponding FPT while remaining EITC eligible (single one child, 229.12%; single two children, 225.77%; married one child, 215.77%). Married couples and individuals without children benefited far less, earning 118.30% and 111.38% of their FPT, respectively. The findings show that the outcome percentages dramatically vary between those with and without children. This disparity engenders a deservedness narrative, delineating who is deserving of receiving the credit. The EITC is unequally available and needs to be adjusted. Social workers should therefore advocate for policies that anchor the EITC phase-out threshold to at least 200% of the FPT for childless households, aligning it with the threshold for households with children.