Thousands of Older Workers in Every State Excluded from the Earned Income Tax Credit Because of Their Age

Summary

The Earned Income Tax Credit (EITC) is a major federal program designed to keep people out of poverty and encourage employment by supplementing wages for millions of low- and middle-income Americans. However, the credit is not available for most workers 65 and older, simply because of their age. New estimates provided by the Urban Institute to AARP show that eliminating the age cap would benefit about 1.3 million taxpayers. This Fact Sheet provides estimates for the number of otherwise eligible taxpayers over 64 currently disqualified by the EITC because of the age restriction. Read the full report.

Key Takeaways

• The EITC is a wage subsidy provided as a refundable federal income tax credit that is designed to keep people out of poverty and encourage employment by supplementing wages for low- and middle-income Americans.
• First enacted in 1975 as a small temporary provision, it has since become “the largest need-tested antipoverty program that provides cash benefits.”
• Most otherwise eligible workers over 64 are disqualified for the EITC because of the age restriction.
• Eliminating the age cap would benefit about 1.3 million taxpayers nationwide.
• Eliminating the age cap would benefit about 100,000 or more older workers in each of the three largest states -- California Florida and Texas --and thousands more in other states.