The signs are now up at the corners of major intersections:
- Get up to $7,830 with three children
- Get up to $6,960 with two children
- Get up to $4,213 with one child
Sometimes the amounts are higher:
- Get up to $12,930 with three children
- Get up to $10,360 with two children
- Get up to $5,913 with one child
These signs are advertisements for welfare payments.
Tax deductions—and exemptions, exclusions, and loopholes—lower one’s taxable income and therefore the amount of taxes owed to the federal government. It doesn’t matter what the deductions are for, what the amounts are, whom they benefit, or why they were instituted. Tax deductions are always a good thing because they allow Americans to keep more money in their pockets and out of the greedy hands of Uncle Sam.
Tax credits are even better.
Tax credits are dollar-for-dollar reductions in the amount of income tax owed. It doesn’t matter what the credits are for, what the amounts are, whom they benefit, or why they were instituted. Tax credits are always a good thing because they allow Americans to keep even more money in their pockets and out of the greedy hands of Uncle Sam.
Tax deductions and credits are not subsidies that have to be “paid for”—not unless you think that the federal government is entitled to a portion of every American’s income.
But then there are “refundable tax credits.”
Regular tax credits may reduce the tax owed to zero, but once that happens, no remaining credit can be taken. A refundable tax credit is treated as a payment from the taxpayer like federal income tax withheld or estimated tax payments. If the tax credit “payment” is more than the tax owed after the regular tax credits are applied, then the taxpayer receives a “refund” of money that he never actually paid in.
The aforementioned signs, which are ubiquitous during tax season, get their figures from the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC).
The amount of one’s EITC benefit depends on a recipient’s income and number of children. For tax year 2024, the maximum amount of EITC that one can receive is:
$7,830 with three or more qualifying children
$6,960 with two qualifying children
$4,213 with one qualifying child
$632 with no qualifying children
To receive the EITC, one’s earned income and adjusted gross income (AGI) must each be less than:
$59,899 ($66,819 married filing jointly) with three or more qualifying children
$55,768 ($62,688 married filing jointly) with two qualifying children
$49,084 ($56,004 married filing jointly) with one qualifying child
$18,591 ($25,511 married filing jointly) with no qualifying children
And, as an added bonus, the EITC has no effect on other welfare benefits. According to the IRS:
Any refund you receive because of the EIC can’t be counted as income when determining whether you or anyone else is eligible for benefits or assistance, or how much you or anyone else can receive, under any federal program or under any state or local program financed in whole or in part with federal funds.
The CTC is a partially refundable tax credit. It provides households with up to $2,000 per child. However, the maximum refundable amount is $1,700. This is the Additional Child Tax Credit (ACTC).
Refundable tax credits are the ultimate form of welfare because they are payments made in cash like the TANF or SSI programs instead of payments made to a third party, like Medicaid, or deposited on an Electronic Benefit Card (EBC), as in SNAP (food stamps).
Real welfare reform must start with the elimination of refundable tax credits. Just don’t look for Republicans to eliminate them. They have increased them for decades.
The post Millions of Americans Will Begin Receiving Large Welfare Payments This Month appeared first on LewRockwell.