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Do Doubled-Up Families Minimize Household-Level Tax Burden?

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  • Maggie R. Jones
  • Amy B. O’Hara

Abstract

This paper examines households with children and at least two related tax filers to determine whether the household lowers income tax liability by optimally reassigning dependents among filers. Using a simulation strategy, we examine the dependent claiming that leads to the lowest income tax liability for a household, and ask whether multifamily households claim optimally. We find that taxpayers in multifamily households reassign dependents to filers as the payoff to doing so — in terms of either tax minimization or EITC benefit — increases; and that the propensity to reassign dependents is greater for EITC-eligible filers.

Suggested Citation

  • Maggie R. Jones & Amy B. O’Hara, 2016. "Do Doubled-Up Families Minimize Household-Level Tax Burden?," National Tax Journal, National Tax Association;National Tax Journal, vol. 69(3), pages 613-640, September.
    • Handle: RePEc:ntj:journl:v:69:y:2016:i:3:p:613-640
    DOI: 10.17310/ntj.2016.3.05
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    Cited by:

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    2. Lukáš Moravec & Gabriela Kukalová & Jakub Ječmínek & Luboš Žáček, 2018. "Czech Household Tax Burden Estimation," Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, Mendel University Press, vol. 66(6), pages 1557-1564.
    3. Olivier Bargain & Damien Echevin & Nicolas Moreau & Adrien Pacifico, 2019. "Inefficient Couples: Non-minimization of the Tax Burden among French Cohabiting Couples," TEPP Working Paper 2019-05, TEPP.
    4. Emily Y. Lin & Joel Slemrod, 2024. "Gender tax difference in the U.S. income tax," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 31(3), pages 808-840, June.
    5. Bruce D. Meyer & Derek Wu & Grace Finley & Patrick Langetieg & Carla Medalia & Mark Payne & Alan Plumley, 2020. "The Accuracy of Tax Imputations: Estimating Tax Liabilities and Credits Using Linked Survey and Administrative Data," NBER Chapters, in: Measuring Distribution and Mobility of Income and Wealth, pages 459-498, National Bureau of Economic Research, Inc.
    6. Buettner, Thiess & Erbe, Katharina & Grimm, Veronika, 2019. "Tax planning of married couples and intra-household income inequality," Journal of Public Economics, Elsevier, vol. 179(C).
    7. Iselin, John & Mackay, Taylor & Unrath, Matthew, 2023. "Measuring take-up of the California EITC with state administrative data," Journal of Public Economics, Elsevier, vol. 227(C).

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