The benefits of many provisions of the individual income tax code vary depending on a taxpayer’s family status. Similarly, tax rates and brackets vary by whether taxpayers are single, married, or filing under a different status. Qualifying requirements vary across these provisions, and some combine child-related benefits with work-related benefits. While these policies are designed to help taxpayers, they add unnecessary complexity to the tax code and thus are well suited for reform.
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The U.S. Tax Cuts and Jobs Act (TCJA) made important changes to three of the primary family provisions in the tax code: the standard deduction, the personal exemption, and the child tax credit. However, further reforms could consolidate the various family-related credits into streamlined credits for children and for work and provide certainty to taxpayers by making the changes of the TCJA permanent.
This paper reviews six family-related tax provisions under current law, including how the TCJA reformed three of the primary family provisions, and examines the need for further reform.