State Earned Income Tax Credit
Rationale
The Earned Income Tax Credit (EITC) is a tax policy tool to supplement the after-tax earnings of low- and moderate-income working families. The federal government administers the EITC through the federal income tax. A growing number of states have also enacted EITCs as a way to reduce child poverty, reward families moving from welfare to work, and increase the disposable income of families struggling to make ends meet. Having greater disposable income increases the potential for saving.
About Measure
State EITCs for tax year 2000. States receive credit for having one or more of the following:
- a state EITC,
- a state EITC that is refundable for all families who have children and receive the federal EITC,
- a refundable state EITC with credit set at least at 15% of the federal credit.
A state receives 0 points if it does not have any of the initiatives, 0.33 points if it has one, 0.67 points if it has two, and 1 point if it has all three. disposable income of families struggling to make ends meet.
Source
Center on Budget and Policy Priorities. (November 2000). A hand up: How state Earned Income Tax Credits help working families escape poverty. Washington, D.C.: Author.
