Child support has been a core component in children’s economic wellbeing since public policy shifted its focus, reducing welfare caseloads and encouraging support from noncustodial parents (NCPs).  Recent research finds a significant proportion of those NCPs have barriers to paying support, such as unemployment, low income, high child support debt, complex family obligations, and incarceration.  Various policies have been designed to improve their ability or willingness to pay, including employment and training services, tax credits, and parenting programs.  However, there has not always been a good match between program interventions and NCPs’ actual characteristics.  Specifically, tax credits for parents who have fully paid their child support (the NCP EITCs) have been proposed and launched in some states without much analysis of how many NCPs, with what characteristics, would likely be eligible for the program.

I first overview the range of policy design decisions that could be made for NCP tax credits, including eligibility based on different income levels and child support compliance levels and the ways that NCP EITCs could interact with other features of the tax system.  I then summarize the characteristics of NCPs and their children who would be eligible for different policy designs.  For example, for parents who live with some of their children and not with others, the way in which the (regular) EITC, the Child Tax Credit and an NCP EITC interact could be quite important and would affect estimates of who receives the NCP EITC and at what level.  Policies that base eligibility on whether a NCP pays full support, partial support, or a large share of his income for child support would reach different populations of NCPs.  Finally, I consider alternative goals policy-makers may be hoping to achieve, and make recommendations on which designs would be predicted to best meet various policy goals.

I use administrative data from Wisconsin and compare my results with national data from the Survey of Income and Program Participation.  Results from data on parents who owed child support in the late 2000s in Wisconsin show that if the maximum income for any credit is $32,000 and the only parents eligible are those who are paying their child support in full, only 17 percent of NCPs with orders are estimated to be eligible.  This estimate is consistent with findings from the implementation of the New York NCP EITC.  The results show that 16 percent of NCPs with orders would be eligible if eligibility were expanded to those paying at least 20 percent of their income, and this share-of-income policy reaches a lower income population (with the median income $8,657, compared to $19,969 in the previous scenario).  A strength of the paper is that it contrasts results that derive from detailed information on child support orders and payments in a single state with less precise information for a nationally representative sample.  The study has clear policy implications for low-income noncustodial parents and the economic wellbeing of their children.