Vice President for State Fiscal Policy
There’s growing momentum in the states to adopt and expand state-level earned income tax credits (EITCs). In 2017, Hawaii, Montana, and South Carolina each created a new EITC, and California, Illinois, and Minnesota expanded their existing credits, as we’ve highlighted in a paper released today. That brings the total count to 29 states plus the District of Columbia that use state EITCs to boost the incomes of roughly 11 million working households struggling on low pay (see map).
The credits build on the federal EITC’s proven record, helping people keep working, make ends meet, and improve their children’s life chances. Like the federal credit, state EITCs also help build an economy that works for everyone, including many women and people of color not fully sharing in the gains of today’s economy.
As the 2018 legislative sessions begin, momentum for state EITCs seems strong. Support for new or expanded credits — most of it bipartisan — includes the following:
State lawmakers are wise to advance state EITCs, for several reasons:
States can reduce financial hardship and create economic opportunity even more by adopting or expanding a state EITC in tandem with raising the minimum wage, as we’ve noted in another paper released today.