Tax Credits and Shared Parenthood: Improving Child Tax Benefits for Children when Parents Live Apart

When parents live apart, typically one parent may claim the child for tax credit purposes. We estimate the impact of alternative policy options, allowing either parent’s earnings or joint earnings to be used to claim the earned income tax credit (EITC) and the child tax credit (CTC). When either parent’s earnings may be used, the estimated share of families qualifying for the EITC grows from 53.9 to 73.8 percent; among parents with earnings below the poverty level, 28.9 percent newly qualify. CTC participation rises 14.7 percentage points; among poor families, participation rises 32.9 percentage points, substantially increasing the anti-poverty impact for single-parent families.