Earned Income Tax Credit (EITC) Marriage Penalty of $8,400

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

The worst marriage penalty is for couples earning between $26,000 and $60,000 who have three or more children. The EITC does not offer an equal increase in credit for every child. The first child is worth the most, with diminishing benefits for more children. It pays a pittance for the third child compared to the first two and nothing for any additional children. Yet unmarried couples can split children on their tax returns, giving them the greater value of a first and second child credit for their fourth or fifth child.

The marriage penalty reaches a maximum of $8,400.

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.