If the number of hours you work from week to week are predictable, HMRC call this a 'normal working pattern', even if your hours are different each week. You can give HMRC your average weekly hours over whatever period your normal working pattern is. For example, if it's common for you to work 20 hours and 40 hours on alternate weeks, you could put your normal working hours as 30 hours per week.
If your working hours are unreliable and irregular, you might not be able to say what hours are normal for you. If this is your situation, contact HMRC to get advice on how to describe your weekly hours. Or you can contact your nearest Citizens Advice. If you share responsibility for a child, for example if you and your partner are separated, only one of you can claim tax credits for the child. UK has a list of circumstances you can claim tax credits when not working and how long you can claim for.
If you're 18 or over, you can use the Turn2us benefits calculator to work this out. If you can get working tax credits you might also be able to get other benefits. If you're 18 or over, you can use the Turn2us benefits calculator to check which benefits you can get. Skip to navigation Skip to content Skip to footer. Top links Housing benefit. Top links Template letter to raise a grievance at work. Top links Our pensions advice Write a letter to your creditors.
Top links If you want a refund because of coronavirus Contact the consumer helpline Report to Trading Standards Problems with a used car Return faulty goods Buying a used car Your energy supply View all. Housing Coronavirus - if you have problems with renting Renting privately Renting from the council or a housing association Homelessness Repairs in rented housing Renting a home Mortgage problems Discrimination in housing View all in Housing. Family Living together, marriage and civil partnership How to separate Sorting out money Making agreements about your children If you were living together Death and wills Gender violence Children and young people View all in Family.
Top links Making a will Complaining about social care services What does it mean to have power of attorney? Child abuse - advice and support Advice for people affected by child abuse. Law and courts Legal system Claiming compensation for a personal injury Discrimination Parking tickets Civil rights. Top links Making a small claim Help for victims of rape and sexual violence. Health Coronavirus - rules you need to follow NHS healthcare Help with health costs Discrimination in health and care services Going abroad for dental care NHS and social care complaints.
The Tax Reform Act of , signed by President Reagan, indexed the maximum earned income and phase-out income levels to inflation. The EITC is work-oriented in that the amount of the credit is based on earnings.
Earnings include wages and salaries as well as self-employment income, but do not include income that is not connected with employment e.
The amount of the credit first increases as earnings increase, reaches a plateau, and then falls as earnings increase. The credit phases out at a rate of The child tax credit had broad bipartisan support. However, the value of dependent exemptions in is approximately what it was in when the latter is adjusted for inflation. The credit is partially refundable the refundable portion is called the additional child tax credit. Unlike the EITC, the child tax credit is not targeted to just lower-income taxpayers.
In fact, the limits on the additional child tax credit cap the refundable portion of the credit for the lowest-income taxpayers, but usually not for middle-income taxpayers. In addition, the CTC is a fixed per child amount and thus does not take into consideration economies of scale within the family.
Historically, the federal income tax system has related tax liability to family size. Other major family-related tax provisions are:. These provisions are available to taxpayers at all income levels, but the benefits of some may be limited for the highest-income taxpayers by other tax provisions. The first three provisions are considered part of the normal income tax system and, therefore, are not considered tax expenditures.
The last provision, the child and dependent care tax credit, is contingent on employment and earnings, and is considered a tax expenditure. Exemptions for the taxpayer have been in the tax code since the beginning of the individual income tax.
Exemptions do not affect tax liability in the same way that tax credits do. Since , working taxpayers have been able to claim a nonrefundable tax credit for employment-related care expenses for children and other dependents.
The credit rate is reduced as AGI rises the minimum credit rate is 20 percent. Most taxpayers claiming the credit receive less than the maximum amount of the credit. Since this credit is nonrefundable, working taxpayers with no tax liability cannot claim the credit.
The first is simplicity and convenience—the provision should be clearly stated, not arbitrary, and minimize the inconvenience of filing the tax return. The second criterion is efficiency—the extent to which the provision adds or removes economic distortions. Whether or not a tax incentive achieves its objective, such as increasing work effort, can be considered a question of efficiency.
Lastly, a provision should be judged on equity—how the benefit or burden of the provision is distributed among taxpayers, and how it changes the distribution of the overall tax burden.
As Congress has increasingly used the tax code to pursue policy goals, tax returns have become longer and more complex. A taxpayer claiming the EITC must file the six-line Schedule EIC providing information on the qualifying children with her tax return and calculate the amount of the credit using a six-line worksheet.
Claiming the CTC involves filing the line Schedule for the additional child tax credit and calculating the credit using a line worksheet. This paperwork burden entailed in claiming the EITC and the CTC is mitigated somewhat by the use of paid tax preparers or volunteer tax preparers, and electronic tax return filing.
Almost 80 percent of taxpayers filing the or A filed electronically in , and 60 percent used a paid or volunteer tax preparer IRS Earlier studies have estimated similar improper payment percentages for example, IRS However, EITC noncompliance studies have shown that the most common errors leading to overpayments involve unintentional misreporting of qualifying children McCubbin ; IRS Furthermore, the noncompliance studies do not take into account underpayments. It is easy to understand how these unintentional errors occur.
The criteria for qualifying children vary among different tax provisions. The IRS has prepared a three-page table listing the qualifying child criteria for the EITC, CTC, dependent exemption, head of household filing status, and the child and dependent care credit. Most taxpayers with children take advantage of two or more of these tax provisions, and confusion is unavoidable when a child may be a qualifying child under one provision but not another.
Taxes and tax provisions can change taxpayer behavior by introducing incentives or disincentives. By affecting the after-tax wage rate, these tax credits can affect labor supply or work effort, although the effect is theoretically ambiguous.
A higher after-tax wage due to, say, a tax reduction increases the price of leisure. This would lead an individual to take or purchase less leisure, or work more. This is known as the substitution effect. This is known as the income effect.
Consequently, the total effect is ambiguous. The after-tax wage rate for working one more hour is the hourly wage multiplied by one minus the marginal tax rate. For most workers, the marginal income tax rate is either 10 percent, 15 percent, or 25 percent.
Figure A shows the marginal tax rate of married workers with two children as annual earnings increase. The marginal tax rate varies from minus 55 percent as the tax credits phase in to plus 36 percent as the EITC phases out. In the phase-in range, the after-tax wage is 55 percent higher than the before-tax wage rate, which provides an incentive to increase labor supply either to begin working or work more hours.
In the phase-out range, the after-tax wage rate is 36 percent lower than the before-tax wage rate and provides an incentive to work less that is, reduce labor supply. Since its inception, numerous studies have examined the labor supply effects of the earned income tax credit reviewed in Hotz and Scholz ; Eissa and Hoynes a; and Meyer Most studies focus on single mothers and find that the EITC increases labor force participation that is, induces single mothers to find a job.
But for those already working, there is mixed evidence that the EITC significantly affects the number of hours worked. Chetty, Friedman, and Saez forthcoming find that workers with children increase their hours of work in the EITC phase-in range, but do not substantially change their hours in the phase-out range.
This suggests that the high marginal tax rates associated with the EITC phase out have limited work disincentive effects. A few studies examine the EITC and the labor supply of married taxpayers. Overall, this research indicates that the EITC has a positive labor supply effect; it increases labor force participation with little or no effect on hours worked. The high marginal tax rate in the EITC phase-out range has no apparent effect on labor supply. Most research that has examined the tax effects on marriage conclude that the tax credits have not affected marriage patterns reviewed in Hotz and Scholz Evidence suggests that the tax credits, however, may have small positive incentive effects on fertility reviewed in Hotz and Scholz The two tax credits are designed to increase the after-tax income of low- and moderate-income individuals and families, especially those with children.
Since the credits redistribute income, they can be judged on their effect on poverty, tax progressivity, and after-tax income inequality. These tax credits can be thought of as government transfers, part of which is used to pay income tax liability the nonrefundable part and the rest available for consumption or saving the refundable part.
Over half of the individuals moved above the poverty threshold were children. The effect of the two tax credits on poverty is not uniform; it varies by family size. Table 3 reports the before- and after-tax poverty rates of taxpayers receiving the EITC or the CTC, by tax filing status and number of qualifying children.
The after-tax incomes of these two groups leave even greater percentages in poverty. These after-tax poverty rates undoubtedly would have been higher without the EITC, but for these taxpayers the credit does little to offset income and payroll taxes. On the other hand, taxpayers with qualifying children married or single experience a reduction in poverty rates due to the EITC and CTC. For some of these taxpayers, the two credits together more than offset income and payroll taxes to raise living standards.
Note: State taxes and income from means-tested public assistance are not included in the analysis. As would be expected given the effect on poverty, the tax benefits of the credits are progressively distributed, as measured by the Suits index. The Suits index is negative if the benefits are predominately received by taxpayers in the upper part of the income distribution.
It is positive if the benefits are predominately received by those in the lower part of the distribution. The estimated Suits index for the child tax credit is 0. The effect on income inequality can be measured by the Gini coefficient, which varies from 0 to 1. Getting Working Tax Credit means you won't be affected by the Benefit Cap which limits the total amount in some benefits that people of working age can receive.
Working Tax Credit will be paid directly into your bank or building society or through the Payment Exception Service if you are unable to open or manage one of these or a similar account. Working Tax Credit is usually paid every four weeks but you can choose to have it paid weekly by asking HMRC to change your payments.
Working Tax Credit counts as income when working out your entitlement to most other means-tested benefits. If you would like to tell us more please visit our contact page.
Donate Your Situation Back Your Situation In this section you will find information about benefits and grants relevant to your situation. Back Get Support In this section, you will find the Benefits Calculator; Grants Search; details about Turn2us' direct grant-giving funds; and links to other sources of information and help. Back Support Us In this section you will find information on how you can get involved with supporting Turn2us and the work we do. Back Working With Us In this section you will find information aimed at charity fund providers and those working with people in financial need.
Back About Us Turn2us helps people in financial need gain access to welfare benefits, charitable grants and other financial help — online, by phone and face to face through our partner organisations.
What is Working Tax Credit? Can I get Working Tax Credit? How much Working Tax Credit will I get?
0コメント