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New Family & Work Tax Credits Proposal | Enhanced Tax Benefits & Simplified Computation

This proposal introduces the New Family Credit and New Work Credit, enhancing tax benefits with easier computation methods. The Family Credit adjusts for family size, while the Work Credit boosts work incentives and offers higher rates for workers with dependents, all designed to simplify the tax process.

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New Family & Work Tax Credits Proposal | Enhanced Tax Benefits & Simplified Computation

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  1. Twelfth Public Meeting October 18, 2005

  2. The New Family Credit • The provisions to adjust for family size and ability to pay in the current code are redundant and unnecessarily complex New Family Credit

  3. The New Family Credit • Provides tax benefit comparable to current system • Easy computation Step 1: Figure base amount of Family Credit Step 2: Add amounts for children and other dependents Step 3: Subtract the Family Credit from tax due

  4. The New Work Credit • Maintains work incentives comparable to the current system • Credit amount increases as the amount of work income increases • Credit rate and maximum credit is higher for workers with dependents • Simpler structure would be coordinated with Family Credit • Almost all of the eligibility rules and computations flow from Family Credit • Designed to facilitate easy computation for taxpayers or for the IRS to compute on behalf of taxpayers New Work Credit

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