State & Local Government Policy, Business and Technology

Poor and Childless? Your Taxes Are Punishing You.

Governing: Four years ago, New York City officials and a group of social scientists launched an experiment based on a simple question: Would a couple thousand dollars a year in extra tax breaks help low-income, childless adults find work and increase their earnings?

Early results suggest the answer is yes, which could boost proposals in Congress and states to expand the tax credit for low-income workers.

A three-year pilot project in New York City offered up to $2,000 in annual tax credits to adults who either have no children or aren't the primary caretaker of their children and make no more than $30,000 a year. Data from 2017 won’t be available until next year, but an interim report from 2016, the second year of the project, found that participants saw their earnings increase by 6 percent and employment by 2.5 percent. Among the participants who were parents, the likelihood of making a child support payment went up 9 percentage points and the average amount they paid each month increased by $54.

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