Credit Examples under Federal Policy: 

The Cost of Living Refund rewards forms of work that are not traditionally captured by the EITC, broadens the pool of eligible recipients, and increases the credit amount for more people:

  • A single, childless 26 year old studying more than half-time at their local community college and earning $10,000 would receive $4,000 under the Cost of Living Refund. Under the EITC, they would receive just $401. If they went to school full-time and their earned income dropped to zero, they would still receive the Cost of Living Refund’s $4,000 credit for students. Under the EITC, they’d receive nothing.

  •  A childless single caregiver of an 80 year old dependent parent would receive no less than $4,000 minimum caregiver credit under the CLR, even if they had no earned income. Under the EITC, they would receive nothing. If they had $25,000 in earned income, they would still receive $4,000 under the CLR. Under the EITC, they would receive nothing. Automatic filing could help taxpayers like this caregiver, who would not traditionally claim the EITC due to the low credit amount available, claim the substantial CLR.

  • A childless single adult earning $10,000 in wages would receive a $4,000 Cost of Living Refund. Under the EITC, they would receive just $401. Under the CLR’s periodic payment option, rather than wait until tax time to receive their credit, they could elect to receive a $333 income boost every month.

  • A single, childless adult earning $20,000 would receive $4,000 under the the CLR. Under the EITC, they would receive nothing. This constitutes a 20% increase in income.

  • A married caregiver of a two year old child earning $30,000 would receive $8,000 under the CLR. Under the EITC, they would receive $3,461. Even if the family’s earned income dropped to zero, they would still be eligible for the $8,000 minimum credit for caregivers. Under the EITC, they would receive nothing.

  • A married couple with one child making $50,000 would receive $8,000 under the CLR. Under the EITC, they would receive nothing.

  • A married couple with two children earning $45,000 would receive $8,000 under the CLR. Under the EITC, they would receive $1,362.