Would someone explain why the Earned Income Tax Credit isn't applicable before age 25?

[BreweryYardRat]

I just found out that it's not. Got my W-2 today, and it was (as expected) a sick joke, so I was really hoping I'd be able to claim the EITC this year.

Does anyone understand -- or even have a guess about -- the reasoning behind this decision on the IRS's part?

[dawg]

1. With tax law, there is no "why".

Things either "are" or they "are not". There is no "why".

[customerserviceguy]

2. I used to be a tax accountant

and while I have not practiced in many years, it's probably a recognition of the age that most people stop being dependent on their parents. Of course, it is not age limited when it comes to an EITC for your own kids, but when you're a single person under the age of 25, not making squat, you're probably still living with your family. The credit was intended to help the working poor, and while I do personally recognize that there are a goodly number of young people between the ages of 18 and 24 who are trying to make enough to live on with a minimum wage or part time job, the great majority of that age group is not the target of the credit.

[unblock]

4. i think that was a good enough argument to cover the political realities

that the working poor under-25 group didn't have sufficient congressional clout to get themselves qualified.

there are surely better ways to determine if someone under the age of 25 "deserves" the credit or is otherwise in the "target" of the credit. simply making the requirement that they can't be a dependent on someone else's return would seem to get most of the way there, rather than relying on age.

[customerserviceguy]

5. That would still cover a lot of students

Many are not on their parents' taxes, yet are still being "supported" by student loans and grants, and are not in the working poor that were targeted by this credit.

I really can't see that age limit changing anytime soon.

[dsc]

6. yea but unless those students have dependents themselves the EIC

is exceptionally minimal. In the early 2000's I was single, very low income and without kids. I qualified for something like seven bucks. I didn't even bother taking it since it was such a piddly amount. I would imagine people who were students would be in a similar situation.

[customerserviceguy]

8. The very idea of providing the EIC

for someone without kids is quite new. When it was originally available for use in 1975 (yes, folks, that was the Nixon Adminstration that got it in, part of their "negative income tax" proposal), it only covered people with dependent children. Also, it was not refundable, both the concept of refundability and as an extra income to the working childless poor didn't come along for decades later.

Given the fact that we are in worse financial shape than ever before, plus the likelihood that we are going to have either a Repuke majority or a Repuke minority plus a goodly number of Blue Dogs in the House, I just don't see any expansion of the EIC. In fact, one of the many ways to 'pay' for the FICA tax holiday, the extension of UC benefits, and the Medicare doc fix is to eliminate refundable earned income credits for people who are here illegally, even though the children they get them for are US citizens.

That sort of climate is not hospitable to the furtherance of what was originally a progressive idea that came to fruition during the Nixon years.

[dsc]

7. I actually went to the tables

the most a single person, or for that matter a childless married couple, could get is 464. For single people that peak is reached at an income of 6050 and lasts until 7600. For a couple it starts at the same 6050 but lasts until 12700. The EIC then starts to go back down reaching 0 at 13650 for a single or 18750 for a couple. Honestly I can't see any justification for making the age 25. If they don't have kids they would get a pittance and if they do have kids then they are no different than the older people who get the credit.

[customerserviceguy]

9. One of the concepts behind the EIC

is that it is a sort of refund of FICA and Medicare taxes paid by a very low income worker, and it was designed to phase out quickly and completely once that worker got to what used to be something perceived by politicians as a livable wage. The other concept was that people with children deserved more help than childless individuals or couples, and that was reflected in all legislation on the credit.

One significant thing is that it has continuously reflected the ZPG ethos of the early Seventies in that it has never been increased beyond the two children that constitute a replacement generation. Even the fundies couldn't get that to happen, although they've been quite successful at having the regular child tax credit rise, and never be limited to a particular family size.

[unblock]

3. no doubt because the childless under-25 working poor don't contribute enough to congresscritters.

sorry about your situation, but if federal policy needed to make sense, it would look rather different in many areas.