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1 Million Veteran, Military Households Could Lose Working-Family Tax Credits

November 9, 2015 at 12:15 PM

About 1 million veteran and military households will lose some or all of their Earned Income Tax Credit (EITC) or low-income component of the Child Tax Credit (CTC) unless Congress saves key credit provisions scheduled to expire at the end of 2017.  Our state-by-state data show that thousands of such families in each state stand to lose out. 

The EITC and CTC — pro-work tax credits for low- and moderate-income working households — boost the economic security of millions of veteran and military households.  Roughly 2 million veteran and military households earn the EITC, the low-income component of the CTC, or both, an analysis of Census and IRS data shows.  (See our report for details.)  In about 240,000 of them, a household member currently serves in the military; the rest include a veteran.  But about half of those 2 million veteran and military families will lose some or all of their credits if policymakers don’t act.

Congress could also help veterans and current service members by closing the large gap in the EITC for childless adults and non-custodial parents.  Workers who don’t claim dependent children for tax purposes are eligible for little or no EITC; that’s partly why they’re the only group that the federal tax code actually taxes into poverty.  President Obama and House Speaker Paul Ryan have offered nearly identical proposals to help close this glaring gap in the EITC for childless workers.  About 500,000 veterans and military members would benefit from these proposals.