The Earned Income Tax Credit and Older Workers

The earned income tax credit (EITC) is the most important form of income support for low-income workers. However, the credit for workers without qualifying children is not available to workers over age 64 or under age 25. An examination of the rationale behind these age restrictions finds that they should be eliminated. Older workers with incomes low enough to qualify them for the EITC are among the most vulnerable Americans. Tax and other public policies should support and encourage older workers’ efforts to increase their own economic security by remaining in the workforce as long as they choose to do so, rather than signaling that they should retire at age 65. Young, low-wage workers would also benefit from income support and inducements to increase their attachment to the labor force. Data on Social Security benefits, earnings, and student status are readily available and can be used to effectively target the EITC to workers, without relying on age tests. (5 pages)