Earned Income Tax Credit Portability: Respecting the Autonomy of American Families

58 Pages Posted: 15 Jun 2014 Last revised: 1 Mar 2017

See all articles by Mary Leto Pareja

Mary Leto Pareja

University of New Mexico School of Law

Date Written: February 25, 2014

Abstract

The Earned Income Tax Credit (EITC) was a key component of the welfare reform movement that began in the 1970s and expanded in the 1990s. Politicians and the public saw the EITC as a helping hand to working families – a way to “make work pay.” The EITC today is the single largest federal anti-poverty program in the United States. Although the EITC clearly is targeted at families with children, it is not optimally structured to improve child welfare. The current rules limit EITC eligibility to a taxpayer who lives with a child more than six months of the year, presumably on the assumption that shared residence is a rough stand-in for support of a child. This rough approach hurts many children. This Article argues that, in many situations, child welfare would be improved if the noncustodial parent were able to claim the EITC and share the resulting refund with his or her children. To accomplish this, this Article proposes that the law be changed to make the EITC portable between custodial and noncustodial parents. This Article proposes replacing an inflexible rule based on an assumption with a more flexible rule that is not only easy for the IRS to administer but which respects the autonomy of modern American families.

Suggested Citation

Pareja, Mary, Earned Income Tax Credit Portability: Respecting the Autonomy of American Families (February 25, 2014). 117 West Virginia Law Review 1 (2014); UNM School of Law Research Paper No. 2014-19. Available at SSRN: https://ssrn.com/abstract=2450258

Mary Pareja (Contact Author)

University of New Mexico School of Law ( email )

1117 Stanford, N.E.
Albuquerque, NM 87131
United States
505-277-2268 (Phone)

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