Trends and Transitions: Tax Credits for Working Families

Earned Income Tax Credit (EITC)Quick Links

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March 2010

The long-standing federal Earned Income Tax Credit (EITC) puts cash into the hands of working poor families, and that can benefit local and state economies. The federal program delivered $48.7 billion to low-income workers in 2008. And 22 states offer additional tax credits. But too few people take advantage of the credit.

The amount a family can collect varies depending on income and the number of children. This year, families with one child and income less than $35,463 qualify for up to $3,043; families with two children and income less than $40,295 can receive up to $5,028. Even those without children may be eligible.

State lawmakers can work with their state or local EITC outreach campaigns and include information about the credit in their newsletters and on their websites. They can also encourage constituents to use free tax preparation services. A tax return must be filed in order to receive the credit as a
refund.