Tax relief for working people: The Simplified Family Credit (SFC)
What is the SFC?
The Simplified Family Credit (SFC) is proposed as a replacement for the dependent exemption for children, the Earned Income Tax Credit (EITC), the Child Tax Credit (CTC), and the Additional Child Credit (ACC). In a nutshell, it unifies, simplifies, and expands benefits for families with children in the Federal individual income tax. It is fully refundable, which means that even if your tax liability is zero, as long as you do work and have labor earnings, you still receive the benefit in the form of a cash refund from the IRS. If you do not have labor earnings, you cannot receive the credit as a cash refund, but it still does reduce any income tax liability you may have. The SFC was first proposed by Robert Cherry, of Brooklyn College, and Max B. Sawicky, of the Economic Policy Institute (EPI), in the paper published in 2000 by EPI, Giving Tax Credit Where Credit is Due: A ‘Universal Unified Child Credit’ that expands the EITC and cuts taxes for working families.
The SFC replaces approximately 200 pages of instructions, worksheets, forms, and tables in the current tax code with this postcard-sized form.
Calculate your savings under the SFC tax proposal
Related reports and articles
Making Work Pay With Tax Reform
by Max Sawicky and Robert Cherry, EPI Issue Brief #173
The Middle Class Parent Penalty
by David Ellwood and Jeffrey Liebman; who arrived at an SFC-type proposal concurrently with Cherry and Sawicky.
Making Minnesota Taxes More Family-Friendly
by Max Sawicky, EPI Issue Brief #147
Making Illinois Taxes More Family-Friendly
by Max Sawicky, EPI Issue Brief #151
British perspective on refundable tax credits
by Her Majesty’s Treasury
The EITC and USAs/IDAs: Maybe a Marriage Made in Heaven
by Timothy Smeeding
It Takes a Tax Credit to Raise a Child
by Max Sawicky, The American Prospect