Budget and Tax Center: Tax Credits for Working Families Deliver Broad Benefits to the State

The North Carolina EITC was a vital facet of the state’s tax system, building off of the federal tax credit—one of the nation’s most powerful anti-poverty tools for children. The benefi ts of the state EITC extended to the broader economy by promoting work and helping families afford things that make it possible to work, such as gas and child care. The tax credit also helped address how the state asks its lowest-paid workers to pay more as a share of their income in state and local taxes than its highest earners. Without the state EITC, North Carolina’s tax system now asks nearly 1.75 times more from the bottom 20 percent of taxpayers as it does from the top 1 percent.

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