Parenting can be a full-time job. Activists want the tax code to treat it that way.
A “caregiver EITC” would reward parents who stay at home.
About 11 million parents in the US don’t work for a wage. Most of those are stay-at-home moms primarily at home for caregiving reasons, but it’s a group that also includes ill or disabled parents, parents who are retired, and parents still in school.
And for full-time caretakers without a partner who’s working, the US tax code currently doesn’t offer much.
The two big tax benefits for low-income parents — the Earned Income Tax Credit (EITC) and the Child Tax Credit — are both premised on work. The EITC offers massive benefits — up to $5,828 for parents with two qualifying children — but to get the full benefit, parents have to be in a household earning more than $14,570. That limits the benefits going to poor or extremely poor households without a working adult, which have to rely on benefits like food stamps and support from extended family to get by. The Child Tax Credit is even worse, as benefits don’t even start to kick in until a household earns $3,000.
However, a new policy idea, endorsed by a number of Democrats in Congress and pushed by the influential (and deep pocketed) Economic Security Project, would transform the safety net for non-working parents overnight. The idea, known as “caretaker EITC” (and part of a broader proposal formally dubbed the “Cost of Living Refund”), would treat caring for children or vulnerable adults as a job, and entitle caretakers to a full EITC credit for their work.
It’s a move that would likely weaken the incentive for work that the EITC provides, but also provide a fuller safety net for parents. It would create a more even financial playing field CONTINUE READING: Tax credit for stay-at-home parents: the new proposal, explained - Vox
