# The Earned Income Tax Credit (EITC) has a hidden and dangerously perverse element to it

**URL:** <https://boards.straightdope.com/t/the-earned-income-tax-credit-eitc-has-a-hidden-and-dangerously-perverse-element-to-it/684889>\
**Category:** In My Humble Opinion\
**Created:** [March 30, 2014, 10:36am UTC](https://boards.straightdope.com/t/the-earned-income-tax-credit-eitc-has-a-hidden-and-dangerously-perverse-element-to-it/684889 "2014-03-30T10:36:27Z")\
**Posts on this page:** 1\
**Page:** 2

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**Author:** ![Bone](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bone/32/407_2.png) [@Bone](https://boards.straightdope.com/u/Bone)\
**Post date:** [March 31, 2014, 11:59pm UTC](https://boards.straightdope.com/t/the-earned-income-tax-credit-eitc-has-a-hidden-and-dangerously-perverse-element-to-it/684889/21 "2014-03-31T23:59:31Z")

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> [@SlackerInc](#):
>
> **Bone** , you can you give examples of the “lots of situations” you refer to?

Deductibility of IRA contributions have a phase out at around $60K to $70K filing single if you are covered by an employer sponsored 401k plan.

Eligibility for a ROTH IRA phases out at $114K filing single.

In the past, you could get hit with AMT if you were over a certain amount as well, which then applied to all of your income.

Certain education credits have a phaseout as well.

These aren’t quite the same as the EITC that actually provides a disincentive - but it’s not always true that tax on increased income only applies to the marginal amounts above the bracket. That increased income can boost your AGI leading to more phaseouts.

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