Refundable Tax Credit Design: Cohabitating Parents and Gender Presumptions

Authors

• Michelle Lyon Drumbl, Washington and Lee University School of LawFollow

Document Type

Essay

Publication Title

Pittsburgh Tax Review

Publication Date

2025

DOI

https://doi.org/10.5195/taxreview.2025.281

Abstract

This Essay is meant to encourage further thinking to improve upon design options for unmarried cohabitating parents. Are there better ways to recognize the needs of unmarried co-parents (whether living together or not) and to provide support for shared parenting? The policy considerations for providing support to unmarried cohabitating parents are different than those for supporting married couples, given that these individuals lack the financial protections of a formal partnership.

One solution is to have a default rule whereby the CTC is awarded to the primary caregiver. Canada’s gender presumption provides a degree of administrative simplicity, but the IRS could allow individual filers to self-identify as the primary caregiver, avoiding the downsides of associating gender with caregiving. In this scenario, I would favor flexibility for those households in which the primary caregiver does not work or works but is below the phase-in for maximum refundability. Perhaps in those cases, the primary caregiver could be allowed the option to use the other parent’s earnings to qualify for the refundable portion.

More boldly, we can imagine design options for allowing parents to split the CTC and assign a portion to each of the two unmarried parents. For example, while retaining the current rule as the default, Congress could allow an option for the claimant to split the credit 50/50 with the other parent, similar to how Canada allows the credit to be split for shared custody. This would aid both parents financially, which is especially significant if they do not share finances equally, while signaling shared responsibility for supporting the child. This might also signal a step beyond the gender stereotypes associated with caregiving.

Families take on many forms, and family demographics continue to evolve over time. Public policy should acknowledge and adapt to these evolutions.

Recommended Citation

Michelle Lyon Drumbl, Refundable Tax Credit Design: Cohabitating Parents and Gender Presumptions, 23 Pitt. Tax Rev. 143 (2025).