The earned income tax credit (EITC), available to low-income working families, phases out as earnings rise. Because the phaseout is based on family earnings, it creates a marriage penalty, such that many couples are better-off if they are unmarried than if they are married. This penalty disincentivizes marriage between parents, contributing to a high share of children being raised by single parents.

Double the maximum earnings level eligible for an EITC among married families with a child under age five. (The maximum varies according to the number of children.) Maintain the phaseout rate as under current policy, which would make more families eligible for the maximum EITC benefit before it starts phasing out. This would prevent the combined EITC benefit from being smaller when parents are married, thereby encouraging parents to be married.