Table: 2015 phaseouts for individuals that create effective marginal tax rates (MTRs) different from statutory tax rates (STRs) Provision Code § (estimated number Relevant Adjusted Gross How Phaseout Works Effective MTR in relevant AGI Income (AGI) Range by Filing Status (see Notes) Low-Income Taxpayers Credit: No children: Statutory rate 7.65% − 1) Phasein of § 32 $0–$6,580a Earned income (EI) × 7.65% earned income credit One child: Statutory rate 34% − EI × 34% (7 million (M)) $0–$9,880a Two children: Statutory rate 40% − $0–$13,870a EI × 40% § 32(b)(3) Three or more children: EI × 45% $0–$13,870a Statutory rate 45% − Phaseout of earned § 32 income credit Joint: $13,750–$20,330 No children: Statutory rate + 7.65% $503 [7.65% × (EIb $13,750)] – − (15 M) Single or Head of Household $503 [7.65% × (EIb $8,240)] – − (HH): $8,240–$14,820 One child: Statutory rate + 15.98% $23,630–$44,651 $3,359 × (EIb –[15.98% − Single or HH: $18,110–$39,131 $23,630)] $3,359 × (EIb –[15.98% − $18,110)] Joint: $23,630–$49,974 Two children: Statutory rate + 21.06% Single or HH: $18,110–$44,454 $5,548 × (EIb –[21.06% − § 32(b)(3) $23,630)] Joint: $23,630–$53,267 Three or more children: $5,548 × (EIb –[21.06% − Single or HH: $18,110–$47,747 Statutory rate + 21.06% $18,110)] $6,242 × (EIb –[21.06% − $23,630)]
Table: 2015 phaseouts for individuals that create effective marginal tax rates (MTRs) different from statutory tax rates (STRs) Provision (estimated number in relevant AGI Code § Relevant Adjusted Gross Income (AGI) Range by Filing Status (see Notes) How Phaseout Works Effective MTR Low-Income Taxpayers 1) Phasein of earned income credit (7 million (M)) Phaseout of earned income credit (15 M) § 32 § 32(b)(3) § 32 § 32(b)(3) $0–$6,580a $0–$9,880a $0–$13,870a $0–$13,870a Joint: $13,750–$20,330 Single or Head of Household (HH): $8,240–$14,820 $23,630–$44,651 Single or HH: $18,110–$39,131 Joint: $23,630–$49,974 Single or HH: $18,110–$44,454 Joint: $23,630–$53,267 Single or HH: $18,110–$47,747 Credit: Earned income (EI) × 7.65% EI × 34% EI × 40% EI × 45% $503 – [7.65% × (EIb − $13,750)] $503 – [7.65% × (EIb − $8,240)] $3,359 –[15.98% × (EIb − $23,630)] $3,359 –[15.98% × (EIb − $18,110)] $5,548 –[21.06% × (EIb − $23,630)] $5,548 –[21.06% × (EIb − $18,110)] $6,242 –[21.06% × (EIb − $23,630)] No children: Statutory rate − 7.65% One child: Statutory rate − 34% Two children: Statutory rate − 40% Three or more children: Statutory rate − 45% No children: Statutory rate + 7.65% One child: Statutory rate + 15.98% Two children: Statutory rate + 21.06% Three or more children: Statutory rate + 21.06%
JCh14%202015%20fall%20preOHnotes%202of3%20MTRs%20table.docx