by Christopher Freeburn | March 4, 2014 9:30 am
The annual U.S. budget proposal to be unveiled by President Barack Obama on Tuesday will include higher tax credits for childless workers.
Under the proposed Obama budget, the annual income level needed for childless workers to qualify the earned-income tax credit would rise to $18,000. The maximum tax credit for childless workers in the Obama budget would double to $1,000 per year. The Obama budget would also lower the age at which childless workers can qualify for the tax credit from 24 to 21, the New York Times notes.
The proposed Obama budget also calls for an expansion of full-time childcare expense tax credits for full-time workers, as well as a permanent tax credit covering college tuition. Together, the White House says the expanded tax breaks would give a financial boost to roughly 13.5 million workers with low incomes.
Expanding tax credits for childless workers was an idea that Obama highlighted during his State of the Union speech in January. In the speech, Obama praised the earned-income tax credit for helping to reduce inequality and encourage self-advancement of lower income people.
Lost revenue from the tax credits would be offset by the elimination of two tax breaks used by wealthy individuals, hedge funds and investment firms, to reclassify income in ways that avoid federal taxes, Time reports.
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