Highlighting State EITC Efforts on Tax Day

Apr 15, 2013

By Helly Lee and Lavanya Mohan

It’s tax day and for many months now, Volunteer Income Tax Assistance (VITA) sites across the country have assisted working families with their taxes in time to meet today’s deadline. By filing taxes, many low wage workers and families are able to get important refundable tax credits.  Among these is the Earned Income Tax Credit (EITC),  one of the largest anti-poverty programs having reached more than 27 million families and individuals in 2012 and that has far-reaching work, income and health benefits for its recipients. In fact, EITC lifted 6 million people out of poverty in 2011, according to the latest Supplemental Poverty Measure.

Because of the federal EITC program’s proven anti-poverty success, many states have adopted similar state-level Earned Income Tax Credits added onto the federal EITC. Low-income families and individuals who are eligible for the federal EITC are also eligible for the additional state EITC. Currently, 26 states provide a state EITC, 23 of which provide a refundable or partially refundable EITC. In facing tough budget decisions, however, many states have turned to the EITC as a place to cut costs while other states are pushing for improvements to their state programs.

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