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Further details can also be found in the Urban Institute’s technical report on CDF’s website.
To increase the anti-poverty impact of the EITC, CDF increased the rate at which the credit phases in from a range of 34-45 percent (depending on the number of children) to a range of 68-79 percent. We also increased the maximum credit while keeping the rate at which the credit phases out the same (to keep marginal tax rates the same) for nearly all filer types. These changes increase the EITC for the lowest income families and somewhat lessen the marriage penalty. The figure below shows the changes for filers with one child and Table A1.2 shows the parameter changes for all filers.
While extending the EITC to childless adults would benefit children through higher child support payments among other ways, CDF did not model an increase in the EITC for childless adults because the TRIM3 model had no way to link childless adults to non-custodial children.
The following table shows the changes to the reimbursement schedule for the Child and Development Care Tax Credit that CDF asked the Urban Institute to model.
The analysis did not change the earnings requirement or the limit on the amount of child or dependent care expenses that can be claimed: $3,000 of expenses paid per year for one qualifying individual or $6,000 for two or more qualifying individuals.
The following table compares the official poverty measure and the Supplemental Poverty Measure (SPM) in terms of the family resources and expenses included, and how the poverty thresholds are calculated.
Minimum wage as of January 2015. For EITC (r) indicates a refundable credit; (pr) a partially refundable credit. Washington’s EITC was approved in 2008 but has not yet been funded. Wisconsin EITC differs for 1, 2 or 3+ children. FPL=federal poverty level. *as a percent of expenses. *** Virginia does not have a state CDCTC but it does have a deduction for child care expenses equal to the amount on which the federal CDCTC is based. **Minnesota does not disregard any pass through amount; Vermont disregards only $50. Texas adds up to $75 to the TANF payment but does not consider this a pass through; none of it is disregarded. New York, Pennsylvania, and West Virginia pass through and disregard up to $100 for one child and $200 for more than 1 child. CSP=child support payment. (see Appendix 4)