	Introduction

The Earned Income Tax Credit (EITC) is a refundable tax credit available to eligible low-wage workers. Because the credit is refundable, an EITC recipient need not owe taxes to receive the benefit. The report then summarizes how different legislative proposals modify certain parameters of the credit, starting with modifications that expand the credit for workers without qualifying children , followed by those that expand the EITC for workers with qualifying children . Overview of the EITC

Eligibility for and the amount of the EITC are based on a variety of factors, including residence and taxpayer ID requirements, the presence of qualifying children, age requirements for certain recipients, amount of investment income, and the recipient's earned income. Childless taxpayers under age 25 or older than 64 are not eligible for the EITC. There is no age requirement for tax filers with qualifying children. Legislation That Expands the Credit for Childless Workers

Several bills introduced in the 113 th Congress would expand the EITC for childless workers. 2359 , and the Obama Administration's FY2015 budget—would modify how the credit is calculated, increasing the amount of the credit for childless workers. As illustrated in Figure 2 and Figure 3 , these changes would generally increase the maximum value of the credit for childless workers from $496 to approximately $1,000 (Administration budget proposal); $1,300 ( H.R. 2359 ); $1,350 ( H.R. 2116 , S. 836 , S. 2162 ); or $1,500 ( H.R. All else being equal, increasing the credit rate would increase the amount of the credit. Changing the Eligibility Age for the Childless EITC

Currently, childless workers must be between the ages of 25 and 64 to be eligible for the childless EITC. 4117 and S. 836 would lower the minimum age requirement for the childless EITC from 25 to 21, leaving the maximum age limitation unchanged. Simplifying the Rules Regarding the Presence of a Qualifying Child to Allow Certain Tax Filers to Claim the Childless EITC

Under current law, for the purposes of the EITC, qualifying children must meet three requirements: (1) they must be relatives of the tax filer, (2) they must live with the tax filer for more than half the year in the United States, and (3) they must be under 19 years old (or 24, if a full-time student). Legislation That Expands the Credit for Workers with Qualifying Children

There are several bills introduced in the 113 th Congress that would expand the EITC for workers with qualifying children. H.R. H.R. 2116 , S. 836 , and the FY2015 Administration budget proposal would make the 45% credit rate for families with three or more children permanent. 2320 would expand the EITC for tax filers with four, five, six, and seven or more qualifying children by increasing the credit rate, as illustrated in Table 3 . Chairman Camp's Tax Reform Proposal

Among its many changes to the income tax code, the House Ways and Means Committee Chairman Camp tax reform proposal (hereinafter referred to as the "Camp proposal") would change the structure of and eligibility for the EITC. Specifically, the Camp proposal would reduce the amount of the EITC for most tax filers by reducing the maximum value of the credit and the credit rates, as well as by eliminating the expanded credit for families with three or more children.
The Earned Income Tax Credit (EITC) is a refundable tax credit available to eligible workers earning relatively low wages. (Because the credit is refundable, an EITC recipient need not owe taxes to receive the benefit.) Under current law, the EITC is calculated based on a recipient's earnings, using one of eight different formulas, which vary depending on several factors, including the number of qualifying children a tax filer has (zero, one, two, or three or more) and his or her marital status (unmarried or married).
All else being equal, the amount of the credit tends to increase with the number of eligible children the claimant has. For example, the maximum value of the credit in 2014 is $496 for claimants with zero children; $3,305 for claimants with one qualifying child; $5,460 for claimants with two qualifying children; and $6,143 for claimants with three or more qualifying children. In addition, tax filers who have no qualifying children must be between 25 and 64 years of age to be eligible for the EITC. Childless taxpayers under 25 and older than 64 years of age are not eligible for the credit. (There is no age requirement for tax filers with qualifying children.)
This report discusses and analyzes legislative proposals introduced in the 113th Congress that propose modifying the EITC. Some of the bills include provisions to expand the credit for childless workers, by increasing the amount of the credit for these workers (through changes to the formula) and by expanding eligibility. Proposals that expand the credit for childless workers include the following:
H.R. 4117, which would lower the age limit for childless workers to 21 and expand the size of the credit for childless workers, increasing the maximum credit to an estimated $1,500; H.R. 2116, S. 836, and S. 2162, which would lower the age limit for childless workers from 25 to 21 and expand the size of the credit for childless workers, increasing the maximum credit to an estimated $1,350; H.R. 2359, which would increase the size of the credit for childless recipients to an estimated $1,300; and the Obama Administration's FY2015 budget, which would expand eligibility for childless workers to include those 21-67 years of age and expand the size of the credit for childless workers, increasing the maximum credit to an estimated $1,000.
Some bills would also expand the credit for workers with qualifying children. H.R. 2116, S. 836, and the FY2015 Administration budget proposal would make the temporary 45% credit rate for families with three or more children permanent. In addition, H.R. 2320 would expand the EITC for tax filers with four, five, six, and seven or more qualifying children.
Chairman of the House Ways and Means Committee Dave Camp's tax reform proposal would reduce the amount of the EITC for most tax filers, although these reductions could be offset by other tax law changes made by the proposal.