Working-Family Tax Credits Help Over 1 Million Veteran and Armed-Forces Families
Credits Keep More Than 150,000 Such Families out of Poverty
End Notes
[1] Chuck Marr, Chye-Ching Huang, and Arloc Sherman, “Earned Income Tax Credit Promotes Work, Encourages Children’s Success at School, Research Finds,” Center on Budget and Policy Priorities, revised April 15, 2014, https://www.cbpp.org/cms/?fa=view&id=3793.
[2] These poverty figures are a five-year average for 2009 through 2013 using Census Bureau data. The SPM poverty line for a couple with two children was $25,144 in 2013. The poverty-reduction figures cited here include the entire CTC, both its low-income (that is, refundable) and non-refundable portions. Refundable credits like the EITC and the low-income portion of the CTC help families whose incomes are so low that they owe little or no federal income tax.
[3] Published IRS figures show that 20.3 million tax filers with one or more qualifying children claimed the EITC in tax year 2012. In addition, according to unpublished IRS data compiled by the Brookings Institution’s Metropolitan Policy Program, approximately another 3.5 million tax filers claimed the low-income (refundable) portion of the CTC in 2012, not counting those who also claimed the EITC, for a total of about 23.8 million families with children who claimed either credit.
[4] The 6.1 percent estimate is from a Center on Budget and Policy Priorities analysis of the latest five years of data (for 2009 through 2013) from the Census Bureau’s Current Population Survey (CPS). We use five years of data to improve the reliability of the estimates. Taxes and tax credits in the CPS are estimated by the Census Bureau based on income and other information provided by CPS respondents.
[5] The Census data undercount the total number of families receiving the EITC and CTC. For this reason, we start with the actual number of families receiving the credit in IRS records and use Census data to estimate the portion of participating families that are armed-forces families. If we used only the Census data, the results would be similar but a bit lower.
In some respects, our estimates are low. They leave out some veteran and armed-forces families that we could not reliably identify from the Census data, such as families with a member of the armed forces who is serving overseas or stationed in barracks (this member is therefore not covered in the survey). Moreover, because we focus on parents, we do not count families where the only current or former service member is a dependent living at home. For example, recently discharged veterans with service-related disabilities count as dependents for the purpose of the Census EITC and CTC but are not included in our tally.