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      "title": "The Earned Income Tax Credit (EITC): Legislative History",
      "date": "2022-04-28"
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      "id": 595044,
      "date": "2018-03-20",
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      "title": "The Earned Income Tax Credit (EITC): A Brief Legislative History",
      "summary": "The earned income tax credit (EITC), when first enacted on a temporary basis in 1975, was a modest tax credit that provided financial assistance to low-income, working families with children. After various legislative changes over the past 40 years, the credit is now one of the federal government\u2019s largest antipoverty programs. Since the EITC\u2019s enactment, Congress has shown increasing interest in using refundable tax credits for a variety of purposes, from reducing the tax burdens of families with children (the child tax credit), to helping families afford higher education (the American opportunity tax credit), to subsidizing health insurance premiums (the premium assistance tax credit). The legislative history of the EITC may provide context to current and future debates about these refundable tax credits. \nThe origins of the EITC can be found in the debate in the late 1960s and 1970s over how to reform welfare\u2014known at the time as Aid to Families with Dependent Children (AFDC). During this time, there was increasing concern over growing welfare rolls. Senator Russell Long proposed a \u201cwork bonus\u201d plan that would supplement the wages of poor workers. The intent of the plan was to encourage the working poor to enter the labor force and thus reduce the number of families needing AFDC.\nThis \u201cwork bonus\u201d plan, renamed the earned income tax credit, was enacted on a temporary basis as part of the Tax Reduction Act of 1975 (P.L. 94-12). As originally enacted, the credit was equal to 10% of the first $4,000 in earnings. Hence, the maximum credit amount was $400. The credit phased out between incomes of $4,000 and $8,000. The credit was also viewed as a means to encourage economic growth in the face of the 1974 recession and rising food and energy prices.\nOver the subsequent 40 years, numerous legislative changes have been made to this credit. Some changes increased the amount of the credit by changing the credit formula. Major laws that increased the amount of the credit include the following:\nP.L. 101-508, which adjusted the credit amount for family size and created a credit for workers with no qualifying children;\nP.L. 103-66, which increased the maximum credit for tax filers with children and created a new credit formula for certain low-income, childless tax filers;\nP.L. 107-16, which increased the income level at which the credit phased out for married tax filers in comparison to unmarried tax filers (referred to as \u201cmarriage penalty relief\u201d); and\nP.L. 111-5, which increased the credit amount for families with three or more children and expanded the marriage penalty relief enacted as part of P.L. 107-16.\nOther legislative changes changed the eligibility rules for the credit. Major laws that changed the eligibility rules of the credit include the following:\nP.L. 103-66, which expanded the definition of an eligible EITC claimant to include certain individuals who had no qualifying children;\nP.L. 104-193, which required tax filers to provide valid Social Security numbers (SSNs) for work purposes for themselves, spouses if married filing jointly, and any qualifying children, in order to be eligible for the credit; and\nP.L. 105-34, which introduced additional compliance rules to reduce improper claims of the credit.\nTogether, these changes reflect congressional intent to expand this benefit while also better targeting it to certain recipients.",
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      "date": "2017-04-26",
      "retrieved": "2017-08-22T14:59:13.959663",
      "title": "The Earned Income Tax Credit (EITC): A Brief Legislative History",
      "summary": "The earned income tax credit (EITC), when first enacted on a temporary basis in 1975, was a modest tax credit that provided financial assistance to low-income, working families with children. After various legislative changes over the past 40 years, the credit is now one of the federal government\u2019s largest antipoverty programs. Since the EITC\u2019s enactment, Congress has shown increasing interest in using refundable tax credits for a variety of purposes, from reducing the tax burdens of families with children (the child tax credit), to helping families afford higher education (the American opportunity tax credit), to subsidizing health insurance premiums (the premium assistance tax credit). The legislative history of the EITC may provide context to current and future debates about these refundable tax credits. \nThe origins of the EITC can be found in the debate in the late 1960s and 1970s over how to reform welfare\u2014known at the time as Aid to Families with Dependent Children (AFDC). During this time, there was increasing concern over growing welfare rolls. Senator Russell Long proposed a \u201cwork bonus\u201d plan that would supplement the wages of poor workers. The intent of the plan was to encourage the working poor to enter the labor force and thus reduce the number of families needing AFDC.\nThis \u201cwork bonus\u201d plan, renamed the earned income tax credit, was enacted on a temporary basis as part of the Tax Reduction Act of 1975 (P.L. 94-12). As originally enacted, the credit was equal to 10% of the first $4,000 in earnings. Hence, the maximum credit amount was $400. The credit phased out between incomes of $4,000 and $8,000. The credit was also viewed as a means to encourage economic growth in the face of the 1974 recession and rising food and energy prices.\nOver the subsequent 40 years, numerous legislative changes have been made to this credit. Some changes increased the amount of the credit by changing the credit formula. Major laws that increased the amount of the credit include the following:\nP.L. 101-508, which adjusted the credit amount for family size and created a credit for workers with no qualifying children;\nP.L. 103-66, which increased the maximum credit for tax filers with children and created a new credit formula for certain low-income, childless tax filers;\nP.L. 107-16, which increased the income level at which the credit phased out for married tax filers in comparison to unmarried tax filers (referred to as \u201cmarriage penalty relief\u201d); and\nP.L. 111-5, which increased the credit amount for families with three or more children and expanded the marriage penalty relief enacted as part of P.L. 107-16.\nOther legislative changes changed the eligibility rules for the credit. Major laws that changed the eligibility rules of the credit include the following:\nP.L. 103-66, which expanded the definition of an eligible EITC claimant to include certain individuals who had no qualifying children;\nP.L. 104-193, which required tax filers to provide valid Social Security numbers (SSNs) for work purposes for themselves, spouses if married filing jointly, and any qualifying children, in order to be eligible for the credit; and\nP.L. 105-34, which introduced additional compliance rules to reduce improper claims of the credit.\nTogether, these changes reflect congressional intent to expand this benefit while also better targeting it to certain recipients.",
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