- These state credits are usually built on the federal EITC, which delivered about $64 billion to 31 million working families and individuals in 2022. Along with the federal Child Tax Credit, the EITC lifted an estimated 6.4 million people out of poverty in 2022.
- This year, 12 states – Colorado, Connecticut, Hawai’i, Indiana, Maryland, Michigan, Minnesota, Montana, Rhode Island, Utah, Vermont, and Washington – expanded and improved these credits.
- To maximize the impact of their state credits, lawmakers should make the credit fully refundable, increase the matching percentage, extend eligibility to immigrant workers and older and younger workers without dependent children in the home, boost the credit for workers without children and extremely low-income families, and consider monthly payment options.
“The EITC plays a major role in combatting poverty in the United States and there is bipartisan support to expand its role. The EITC’s impact on
future Social Security benefits should be further analyzed. Receiving EITC supplements through the tax system instead of higher wages should not result in reduced Social Security benefits for low- and modest-income workers.”