{
  "id": "R46193",
  "type": "CRS Report",
  "typeId": "REPORTS",
  "number": "R46193",
  "active": true,
  "source": "EveryCRSReport.com",
  "versions": [
    {
      "source": "EveryCRSReport.com",
      "id": 614790,
      "date": "2020-01-24",
      "retrieved": "2020-01-24T23:03:10.435504",
      "title": "Federal Income Tax Treatment of the Family Under the 2017 Tax Revisions",
      "summary": "The federal income tax treatment of the family is affected by several major structural elements applicable to all taxpayers: amounts deductible from taxable income through standard deductions, personal exemptions, and itemized deductions; the rate structure (which varies across taxpayer types); the earned income credit and the child credit; and the alternative minimum tax. Some of these provisions only affect high-income families and some only low-income families, but they are the tax code\u2019s fundamental structural features. They lead to varying tax burdens on families depending on whether the family is headed by a married couple or a single individual, whether children are in the family, and the number of children if so. These provisions also affect the degree to which taxes change when a couple marries or divorces.\nThe 2017 tax revision (P.L. 115-97, popularly known as the Tax Cuts and Jobs Act) changed many of these fundamental provisions, although those changes are scheduled to expire after 2025. This report examines these temporary changes and how they affect families. The prior provisions (which will return absent legislative changes) are discussed in CRS Report RL33755, Federal Income Tax Treatment of the Family, by Jane G. Gravelle, which also includes the historical development of family-related provisions and some of the justifications for differentiating across families, especially with respect to the number of children. \nThe 2017 tax revision effectively eliminated personal exemptions claimed for the taxpayer, their spouse (if married), and any dependent (often referred to as the dependent exemption). However, the increased standard deduction more than offset these losses for taxpayers (and their spouses, if married). In addition, for many taxpayers, the increased child credit more than offset the losses from the eliminated dependent exemption. The tax revision also lowered rates for all three types of tax returns (joint, single, and head of household), although the effects were more pronounced for joint returns. \nIn general, the changes retain significant aspects of prior law. The income tax code after the 2017 tax revision remains progressive across income levels for any given type of family, although effective tax rates are slightly lower. Among families with the same ability to pay (using a measure that estimates how much additional income families need to attain the same standard of living as their size increases), families with children are still favored at the lower end of the income scale, whereas families with children are still penalized at the higher end of the scale. This favorable treatment toward families with children is extended further up into the middle-income level under the 2017 revisions due to the changes in the child credit. \nThe tax system is largely characterized by marriage bonuses (lower taxes when a couple marries than their combined tax bill as singles) through most of the income distribution, although marriage penalties still exist at the bottom (due to the earned income credit) and top (due to the rate structure) of the income distribution. The penalties at the top appear to be somewhat smaller in the new law due to changes in the rate structure and lower tax rates.",
      "type": "CRS Report",
      "typeId": "REPORTS",
      "active": true,
      "formats": [
        {
          "format": "HTML",
          "encoding": "utf-8",
          "url": "https://www.crs.gov/Reports/R46193",
          "sha1": "3983893fea0f73d46b3d772037c559080b0462a1",
          "filename": "files/20200124_R46193_3983893fea0f73d46b3d772037c559080b0462a1.html",
          "images": {
            "/products/Getimages/?directory=R/html/R46193_files&id=/0.png": "files/20200124_R46193_images_adfb68244ff2302daa9308242eb99576b17894cc.png"
          }
        },
        {
          "format": "PDF",
          "encoding": null,
          "url": "https://www.crs.gov/Reports/pdf/R46193",
          "sha1": "885e7ee54e8118ed77c158b7b09992b4ce929d0f",
          "filename": "files/20200124_R46193_885e7ee54e8118ed77c158b7b09992b4ce929d0f.pdf",
          "images": {}
        }
      ],
      "topics": []
    }
  ],
  "topics": [
    "Economic Policy"
  ]
}