Retooling the Childless EITC to Better Support Young Adults

Young adults have been historically left out of important tax policies supporting workers earning lower wages—particularly the Earned Income Tax Credit (EITC)—despite facing similar financial challenges in meeting their basic needs and building savings as other low-wage workers, especially at a time of rising costs of living. A more permanent expansion of the childless EITC offers one way to support young adults’ economic security, promote work, and help young adults in their journey toward economic opportunity and mobility in the labor market. In this joint report by Young Invincibles and the Center on Poverty and Social Policy at Columbia University, we explore the current structure of the childless EITC; examine the financial profile of young adults currently left out; and identify the potential income and anti-poverty effects of expanding the credit to include childless adults aged 18 and older and increase the value of the childless EITC itself.

Key Findings

• The EITC for families with children is one of the largest and most impactful anti-poverty programs in the United States. However, the maximum ‘childless EITC’ is worth just 15% of the maximum EITC for those with one child. The childless EITC also excludes both younger and older workers (i.e., those aged 18-24 and 65+) with low wages, who would otherwise be eligible if they had qualifying children.
   
• Across a range of financial indicators, young adults face levels of economic insecurity similar to, or greater than, older adults. Among young adults under age 35, the financial pressures and challenges facing those aged 18-24 are similar to those of their slightly older peers aged 25-34. However, 18-24-year-olds are excluded from the financial support of the childless EITC.
   
  • Childless 18-24-year-olds with low wages spend almost half of their income on basic needs; report the highest rates of rent burden—including severe rent burden—compared to all other age groups, and have low levels of cash reserves and a median debt-to-income ratio that is significantly higher than the recommended level to secure a loan or access new credit.
     
• Two potential changes could enhance the childless EITC for young adults: an expansion of age eligibility and an expansion of age eligibility alongside an increase in the credit amount.
   
  • An age expansion alone could benefit 3.8 million childless 18-24-year-olds, with an average income increase of $260, keeping 28,000 childless young adults from poverty. 
  • But an age- and credit expansion of the childless EITC together could do more and benefit 5.2 million childless 18-24-year-olds, with an average income increase of $970, keeping 103,000 childless young adults from poverty – an effect nearly four times greater than an age expansion alone.

Suggested Citation:

Brown, Lynneah, Sophie Collyer, Megan Curran, Anastasia Koutavas, Jiwan Lee, Alexander Lundrigan, Danielle Wilson, and Christopher Wimer. 2025. Retooling the childless EITC to better support young adults. New York and Washington DC: Columbia University Center on Poverty and Social Policy and the Young Invincibles. 

Published on April 2, 2025