Fix the EITC

Fix the EITC

December 14, 2024

Today’s economic reality for workers and employers is vastly different than it was in 1975 when the federal Earned Income Tax Credit (EITC) was created to support low-income workers.

The EITC is the nation’s largest poverty reduction tool. It also promotes workforce participation and stimulates local economic growth. In the tax year 2022, 31 million working families and individuals in every state received the EITC. 

The problem: Currently, young workers (ages 18-24) and older workers (65 and over) are excluded from claiming the EITC if they don’t have children.

Age 65+ cannot claim. Older workers who may have a very small Social Security benefit and need to continue working cannot claim the credit

Age 18-24 cannot claim. Young workers ages 18 to 24 who have no family support cannot claim the credit. 

There is no reason to exclude workers who would otherwise be eligible. The reality is that many young people are on their own and many older people have to work to make ends meet. In fact, for workers 65 and over, the poverty rate is increasing within this age group while slowly declining in other age groups, with nearly six million seniors living in poverty.

Our solution: The credit needs an update that reflects our current workforce. We need to permanently eliminate age restrictions that prevent younger and older workers from claiming the EITC.

EITC Age Parity Act

Download the EITC Age Parity Act one-pager to learn more.

Impact

This is a targeted solution that will have a significant economic impact for workers, employers, and local economies. 

Approximately seven million workers–five million young adults and two million older adults–will be eligible for the EITC when age restrictions are permanently removed.

The Joint Committee on Taxation estimates that over a ten year span this change will cost $22 billion – that’s money that will go back into the pockets of workers who spend that money locally. 

Each dollar spent on the EITC generates approximately $1.58 in local economic activity. Annually, EITC-fueled spending returns $34.8 Billion to rural, suburban, and urban communities across the country.

The EITC also helps local economies by growing the workforce. The EITC has been proven to incentivize entering or returning to work which will help address the significant shortage of entry-level workers. 

Support

Today, we are asking you to join the campaign to fix the EITC.

Take Action and tell your Representative to fix the EITC so that millions of younger and older workers are able to access one of the most successful anti-poverty programs in America.

Tell your officials: Take action! 

Download the EITC Age Parity Act one-pager to learn more.

 

Learn More