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ERIC Number: ED462465
Record Type: Non-Journal
Publication Date: 2001-Dec
Pages: 48
Abstractor: N/A
Reference Count: N/A
A Hand Up: How State Earned Income Tax Credits Help Working Families Escape Poverty in 2001.
Johnson, Nicholas
The federal government administers an Earned Income Tax Credit (EITC), as do many states. States that enact EITCs can reduce child poverty, support welfare-to-work, and cut taxes for working poor families. The popularity of state EITCs results from continued child poverty, welfare reform, and tax changes. Research confirms the effectiveness of federal EITCs in supporting work and alleviating child poverty, lifting nearly five million people out of poverty each year, contributing to significant increases in labor force participation among single mothers, and allowing EITC recipients to make investments that enhance economic security and promote economic opportunity. Sixteen state EITCs piggyback on the federal EITC. Eleven states follow the federal practice of making the credit refundable, so the family receives the full amount of the credit. In the remaining five states, the credit is available only to the extent that it offsets a family's income tax, which provides no relief to working families with income too low to owe any taxes. The annual cost of refundable state EITCs ranges from $11 million to $361 million. Most state credits are financed from funds available in the state's general fund. Two appendices present federal EITC parameters and estimated cost of refundable state EITCs. (SM)
Center on Budget and Policy Priorities, 820 First Street, N.E., Suite 510, Washington, DC 20002. Tel: 202-408-1080. e-mail: For full text:
Publication Type: Reports - Descriptive
Education Level: N/A
Audience: N/A
Language: English
Sponsor: Annie E. Casey Foundation, Baltimore, MD.; Deer Creek Foundation, St. Louis, MO.; Ford Foundation, New York, NY.; George Gund Foundation, Cleveland, OH.; John D. and Catherine T. MacArthur Foundation, Chicago, IL.; Mott (C.S.) Foundation, Flint, MI.; Open Society Inst., New York, NY.; William Penn Foundation, Philadelphia, PA.; Public Welfare Foundation, Washington, DC.; Charles H. Revson Foundation, Inc., New York, NY.; Rockefeller Foundation, New York, NY.
Authoring Institution: Center on Budget and Policy Priorities, Washington, DC.
Identifiers - Laws, Policies, & Programs: Earned Income Tax Credit