FairTax Overview
Calculation of the prebate: The monthly prebate check is calculated by multiplying the annual
consumption allowance as measured by the Department of Health and Human Services poverty
guidelines times the FairTax rate and dividing by twelve. Poverty level spending represents what it
costs families of varying household size and composition to buy their necessities. The table below
shows the monthly prebate amount for households of varying composition.
2013 FairTax Prebate Schedule
One-adult household
Two-adult household
Family Size
Annual
Consumption
Allowance
Annual
Prebate
Monthly
Prebate
Family Size
Annual
Consumption
Allowance
Annual
Prebate
Monthly
Prebate
1 person
and 1 child
and 2 children
and 3 children
and 4 children
and 5 children
and 6 children
and 7 children
$11,490
$15,510
$19,530
$23,550
$27,570
$31,590
$35,610
$39,630
$2,643
$3,567
$4,492
$5,417
$6,341
$7,266
$8,190
$9,115
$220
$297
$374
$451
$528
$605
$683
$760
couple
and 1 child
and 2 children
and 3 children
and 4 children
and 5 children
and 6 children
and 7 children
$22,980
$27,000
$31,020
$35,040
$39,060
$43,080
$47,100
$51,120
$5,285
$6,210
$7,135
$8,059
$8,984
$9,908
$10,833
$11,758
$440
$518
$595
$672
$749
$826
$903
$980
For Families/households with more than 8 persons, add $4,020 to the annual consumption allowance for each
additional person. The annual consumption allowance is based on the DHHS 2013 HHS Poverty Guidelines as
published in the Federal Register, January 24, 2013. The annual prebate equals 23% of the annual consumption
allowance.
Qualification: All qualified families are entitled to receive the monthly prebate. A “qualified family”
consists of all family members sharing a common residence. Family members include an individual and
his or her spouse, children and grandchildren, parents and grandparents. Children/students living away
from home are considered family members if they are registered as a student for at least 5 months out of
the year and receive at least 50 percent of their support from the family unit. Children of divorced
parents are considered to be family members of the custodial parent. Incarcerated individuals are not
eligible to be a member of a qualified family.
In order for a person to be counted as a member of the family for purposes of determining the size of the
qualified family, a person must have a valid social security number and be a lawful resident of the
United States. Unlike the Earned Income Tax Credit, the application/registration form that families who
choose to receive the prebate must file is simple and straightforward. Those choosing not to register will
not receive a prebate. The registration form requires only the following information:
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