BEYOND THE NUMBERS
Tomorrow is the 11th annual Earned Income Tax Credit (EITC) Awareness Day — a time to help eligible workers learn about and claim this federal tax credit that helps millions of low- and moderate-income working families make ends meet.
In 2015, the EITC lifted about 6.5 million people out of poverty, including about 3.3 million children. A powerful anti-poverty tool, the EITC does more than help families transition out of poverty. Research shows that the EITC strengthens families, communities, and the country in a number of ways:
- It promotes work and fuels the economy. The EITC increases workforce participation and encourages low-wage workers to get additional education or training to boost their employability and earning power. For every EITC dollar a recipient earns, they return $1.50-$2 to the economy, supporting not only their families but also their communities.
- It expands economic security. Workers mainly use their tax credit to pay for necessities like groceries, transportation, medical expenses, rent, and utilities. The tax refund can also help workers build savings and establish financial stability.
- It increases children’s educational performance and attainment. Children in families receiving the EITC score higher on tests and are likelier to graduate from high school, enroll in college, and earn more when they enter the workforce.
- It improves health outcomes. Expectant mothers with increased EITCs were likelier to receive prenatal care and less likely to give birth to premature or low- birth- weight infants, a study found.
- It provides a short-term safety net. Almost half of taxpayers with children claimed the EITC at least once during an 18-year period, providing a source of temporary insurance and preventing entry into poverty.
Despite these benefits, the IRS estimates that one in four eligible workers don’t claim their EITC. Additionally, this year refund delays may discourage some earners from filing a tax return. Outreach is critical to help make sure eligible workers get the EITC they’ve earned.
That’s why CBPP continues to lead a national outreach campaign promoting the EITC. Our Get It Back Campaign provides resources for partners to connect eligible workers to tax credits and free tax preparation. The campaign offers a range of tools and materials, including an EITC Estimator, a Tax Credit Outreach Kit, and an EITC video.
- El crédito tributario por hijos
- Federal Payroll Taxes
- Federal Tax Expenditures
- Fiscal Stimulus
- Marginal and Average Tax Rates
- Tax Exemptions, Deductions, and Credits
- The Child Tax Credit
- The Earned Income Tax Credit
- The Federal Estate Tax
- Where Do Federal Tax Revenues Come From?
- Where Do Our Federal Tax Dollars Go?