EITC Rules Under Three Law Scenarios

May 26, 2010

Earned Income Tax Credit (EITC) Parameters in 2011

Pre-Bush Tax Policy

Bush Tax Policy

Tax Policy Under

Pres. Obama’s

Proposed Budget

Tax Policy Under

House Democratic

Proposal

3 or More Children

Married Filing Jointly

Other Taxpayers

Married Filing Jointly

Other Taxpayers

Married Filing

Jointly

Other Taxpayers

Married Filing

Jointly

Other Taxpayers

Credit Rate

Same as credit

for 2 or more children

Same as credit for 2 or more children

Same as credit

for 2 or more children

Same as credit

for 2 or more

children

45.00%

45.00%

Same as credit

for 2 or more

children

Same as credit

for 2 or more

children

Phase-out Rate

21.06%

21.06%

Earned Income Threshold

$12,780

$12,780

Maximum Credit

$5,751

$5,751

Phase-Out Threshold

$21,690

$16,690

Phase-Out Limit

$48,998

$43,998

2 or More Children

Married Filing Jointly

Other Taxpayers

Married Filing Jointly

Other Taxpayers

Married Filing Jointly

Other Taxpayers

Married Filing Jointly

Other Taxpayers

Credit Rate

40.00%

40.00%

40.00%

40.00%

40.00%

40.00%

40.00%

40.00%

Phase-Out Rate

21.06%

21.06%

21.06%

21.06%

21.06%

21.06%

21.06%

21.06%

Earned Income Threshold

$12,780

$12,780

$12,780

$12,780

$12,780

$12,780

$12,780

$12,780

Maximum Credit

$5,112

$5,112

$5,112

$5,112

$5,112

$5,112

$5,112

$5,112

Phase-Out Threshold

$16,690

$16,690

$19,870

$16,690

$21,690

$16,690

$21,690

$16,690

Phase-Out Limit

$40,964

$40,964

$44,144

$40,964

$45,964

$40,964

$45,964

$40,964

1 Child

Married Filing Jointly

Other Taxpayers

Married Filing Jointly

Other Taxpayers

Married Filing Jointly

Other Taxpayers

Married Filing Jointly

Other Taxpayers

Credit Rate

34.00%

34.00%

34.00%

34.00%

34.00%

34.00%

34.00%

34.00%

Phase-Out Rate

15.98%

15.98%

15.98%

15.98%

15.98%

15.98%

15.98%

15.98%

Earned Income Threshold

$9,100

$9,100

$9,100

$9,100

$9,100

$9,100

$9,100

$9,100

Maximum Credit

$3,094

$3,094

$3,094

$3,094

$3,094

$3,094

$3,094

$3,094

Phase-Out Threshold

$16,690

$16,690

$19,870

$16,690

$21,690

$16,690

$21,690

$16,690

Phase-Out Limit

$36,052

$36,052

$39,232

$36,052

$41,052

$36,052

$41,052

$36,052

No Children

Married Filing Jointly

Other Taxpayers

Married Filing Jointly

Other Taxpayers

Married Filing Jointly

Other Taxpayers

Married Filing Jointly

Other Taxpayers

Credit Rate

7.65%

7.65%

7.65%

7.65%

7.65%

7.65%

7.65%

7.65%

Phase-Out Rate

7.65%

7.65%

7.65%

7.65%

7.65%

7.65%

7.65%

7.65%

Earned Income Threshold

$6,070

$6,070

$6,070

$6,070

$6,070

$6,070

$6,070

$6,070

Maximum Credit

$464

$464

$464

$464

$464

$464

$464

$464

Phase-Out Threshold

$7,590

$7,590

$10,770

$7,590

$12,590

$7,590

$12,590

$7,590

Phase-Out Limit

$13,660

$13,660

$16,840

$13,660

$18,660

$13,660

$18,660

$13,660

Investment Income Threshold (for EITC)

$3,150

$3,150

$3,150

$3,150

$3,150

$3,150

$3,150

$3,150

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