Conservatives are often big proponents of ending the “marriage penalty” on federal income taxes. Basically, the “penalty” refers to the higher tax rates that married couples face than if they have filed their taxes individually as “heads of household.”
Yesterday, the Innovation Lab team met with our free tax preparation team, who are planning their 2010 tax season. The program’s goal is to make sure every eligible family receives the Earned Income Tax Credit, which is the largest federal anti-poverty program in the U.S. and provides up to $5,600 to working families with children. We’re working together to find ways to reach more of our Head Start and other early childhood program families through the tax program and to make sure they receive the EITC.
In that meeting, I came to learn something I didn’t know. Families with a tax filer who has an Individual Taxpayer Identification Number (ITIN) are not eligible for the Earned Income Tax Credit. ITIN’s are provided by the IRS to any tax-payer that does not have a social security number – mainly certain categories of immigrants (and not necessarily undocumented). These tax-paying workers are denied access to a critical family-supporting credit, even if the other parent does have a social security number. That leaves out a potentially huge swathe of working families from the government’s most important family-supporting, work-promoting, anti-poverty program. And it penalizes the children of married parents, and marriage itself, when one parent has an ITIN.
I’d like to see someone get behind ending this marriage penalty.