Study: Earned Income Tax Credit widely claimed

Republicans and Democrats have also sparred over refundable tax credits in general, with GOP lawmakers saying the Treasury has spent billions on improper claims in recent years.

Democrats, meanwhile, have charged that Republicans are excessively worried about credits most likely to be used by lower- and middle-income taxpayers.

{mosads}A government report released more than a month ago also found that workers unauthorized to work in the U.S. claimed more than $4 billion in refundable tax credits last year.

Refundable credits like the EITC allow taxpayers to receive federal payments if their credits surpass their income tax liability.

In their study, Dowd and Horowitz found that most EITC users, around 6 in 10, claim the credit for no more than two years at a time, while 42 percent only claim the EITC for a single year at a time.

And the two authors found that, at any given point, almost 60 percent of EITC families had been using the credit for five years or fewer.

“The combination of high usage by tax filers with children, short spells of usage and high turnover suggest that the EITC has very broad reach for the filing population,” Dowd and Horowitz wrote in their report, which was published in Public Finance Review.

Still, Dowd and Horowitz also found a significant number of families — 44 percent — end up reclaiming the credit down the line, and 20 percent claim the credit for five or more years in a row.

“At the same time, the EITC acts as a long-term income support for a significant portion of EITC recipients who claim the credit for long periods of time, and for multiple spells, cycling on and off,” they wrote.

The report also found that younger families in which women are the head of household generally claim the credit for a longer consecutive period of time than older families headed by men.

The two authors used IRS data compiled between 1989 and 2006 for their report.