In what ways do the new federal tax laws help the poor, if any?


Quick Answer

As of 2015, recent tax laws that help the poor include the Earned Income Tax Credit and the Saver's Credit, reports Bankrate. Additionally, couples with children who have low incomes can significantly reduce their tax burdens by claiming personal exemptions and standard deductions.

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In what ways do the new federal tax laws help the poor, if any?
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Full Answer

To qualify for the Earned Income Tax Credit, taxpayers must earn taxable income from wages, disability benefits, union strike benefits or self employment, as the Internal Revenue Service explains. Their adjusted gross income must be less than a stipulated amount, which varies depending on whether they are single or married filing jointly and on how many qualifying children they have. Although singles can apply for and receive Earned Income Tax Credits, the credit amounts are much higher for those with children. Qualifying dependent children must be under 19, full-time students under 24 or totally disabled at any age.

The Saver's Credit helps low-income taxpayers put aside funds for retirement, according to the Internal Revenue Service. The amount that taxpayers may receive depends on their filing status, the taxes they owe, their adjusted gross income and their contributions to eligible retirement programs. The credit may either reduce tax liabilities or increase refunds. Other credits and deductions that taxpayers qualify for impact the amount of the Saver's Credit.

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