Earned Income Tax Credit (EITC) Marriage Penalty of $3,603

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In “Earned Income Tax Credit (EITC) Punishes Marriage” I wrote:

If you and your partner are not married but have two children, you have some flexibility. Each of you can earn $17,100 and still collect the maximum $3,169 for a total of $6,338.

A married couple with two children earning the same $34,200 would only collect $2,734. The formula penalizes them $3,604, or 10.5% of their salaries, simply because they are legally married.

Here is a calculator showing that discrepancy:

The calculators values are only approximate. The actual IRS EITC calculations are taken from a table in $50 increments of earned income.

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David John Marotta is the Founder and President of Marotta Wealth Management. He played for the State Department chess team at age 11, graduated from Stanford, taught Computer and Information Science, and still loves math and strategy games. In addition to his financial writing, David is a co-author of The Haunting of Bob Cratchit.