The latest analysis from the U.S. Census Bureau provides an important reminder of the compelling link between public investments and families’ economic well-being. Policy decisions can drastically reduce poverty and improve family economic stability for low- and middle-income families alike, as today’s data release shows.
Tax Credits for Workers and Families
State and local tax policies can often make it more difficult for low- and moderate-income individuals and families to make ends meet. Through the use of a variety of targeted tax credits, state lawmakers can help improve both the fairness of their tax systems as well as the standard of living for low- and moderate-income residents. ITEP resources on tax credits for workers and families provide general and state-specific information about the mechanics of these credits and options for reform including state Earned Income Tax Credits, property tax circuit breakers and child-related tax credits.
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blog September 12, 2023 State Tax Credits Have Transformative Power to Improve Economic Security
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brief September 12, 2023 States are Boosting Economic Security with Child Tax Credits in 2023
Fourteen states now provide Child Tax Credits to reduce poverty, boost economic security, and invest in children. This year alone, lawmakers in three states created new Child Tax Credits while lawmakers in seven states expanded existing credits. To maximize impact, lawmakers should consider making their credits fully refundable, not including an earnings requirement, setting a maximum amount per child instead of per household, setting state-specific phase-out ranges that target low- and middle-income families, indexing to inflation, and offering the option of advanced payments.
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brief September 12, 2023 Boosting Incomes, Improving Equity: State Earned Income Tax Credits in 2023
Nearly two-thirds of states (31 plus the District of Columbia and Puerto Rico) have an Earned Income Tax Credit, an effective tool that boosts low-paid workers’ incomes and helps lower-income families achieve greater economic security. This year, 12 states expanded and improved EITCs.
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blog July 7, 2023 The Highs and Lows of 2023 State Legislative Sessions
Nearly one-third of states took steps to improve their tax systems this year by investing in people through refundable tax credits, and in a few notable cases by raising revenue from those most able to pay. But another third of states lost ground, continuing a trend of permanent tax cuts that overwhelmingly benefit high-income households and make tax codes less adequate and equitable.
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blog July 7, 2023 Refundable Credits a Winning Policy Choice Again in 2023
State lawmakers continue to make groundbreaking progress on state tax credits, with 17 states creating or enhancing Child Tax Credits or Earned Income Tax Credits so far this year. These policies have the potential to boost family economic security and dramatically reduce the number of children living below the poverty line.
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map June 28, 2023 State Action on Child Tax Credits and Earned Income Tax Credits in 2023
In 2023 so far, 17 states have either adopted or expanded a Child Tax Credit or Earned Income Tax Credit. Both these policies can help bolster the economic security of low- and middle-income families and position the next generation for success.
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blog May 3, 2023 Minnesota Lawmakers Re-Envision State Tax System to Center Equity
Minnesota’s House, Senate and Governor’s office have each proposed their own vision as to how the state should maximize its $17.5 billion surplus and raise new revenue, and these tax plans make one thing clear: Minnesota lawmakers are serious about using tax policy to advance tax equity and improve the lives of Minnesotans.
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blog April 12, 2023 8 Things to Know About State Taxes
As Tax Day approaches, it’s worth thinking about not only the taxes that we individually pay but the overall condition of our tax code as well. State tax codes, while… -
blog March 23, 2023 States Prioritize Old Over Young in Push for Larger Senior Tax Subsidies
Under a well-designed income tax based on ability to pay, it is simply not necessary to offer special tax subsidies to older adults but not younger families. At the end of the day, your income tax bill should depend on what you can afford to pay, not the year you were born. It’s really as simple as that.
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blog February 22, 2023 The Five Best Tax Ideas Coming from Governors This Year
The word “tax” appears 97 times and counting in one recent summary of governors’ addresses to state legislators so far this year. The policy visions that governors are bringing, however, vary enormously. While there’s good reason to worry about tax cuts for wealthy families and the flattening or elimination of income taxes, there are at least five great tax ideas coming directly out of governors’ offices this year.
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blog January 18, 2023 Momentum Behind State Tax Credits for Workers and Families Continues in 2023
Refundable tax credits are an important tool for improving family economic security and advancing racial equity, and there is incredible momentum heading into 2023 to boost two key state credits: the Child Tax Credit and the Earned Income Tax Credit.
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blog November 16, 2022 States Can Halve Child Poverty with Child Tax Credits
State policymakers have the tools they need to drastically reduce child poverty within their borders. A new ITEP report, coauthored with Columbia University’s Center on Poverty and Social Policy, explores… -
report November 16, 2022 State Child Tax Credits and Child Poverty: A 50-State Analysis
Regardless of future Child Tax Credit developments at the federal level, state policies can supplement the federal credit to deliver additional benefits to children and families. State credits can be specifically tailored to meet the needs of local populations while also producing long-term benefits for society as a whole
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brief September 15, 2022 Boosting Incomes and Improving Tax Equity with State Earned Income Tax Credits in 2022
States continued their recent trend of advancing EITCs in 2022, with nine states plus the District of Columbia either creating or improving their credits. Utah enacted a 15 percent nonrefundable EITC, while the District of Columbia, Hawaii, Illinois, Maine, Vermont and Virginia expanded existing credits. Meanwhile, Connecticut, New York and Oregon provided one-time boosts to their EITC-eligible populations.
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brief September 15, 2022 More States are Boosting Economic Security with Child Tax Credits in 2022
After years of being limited in reach, there is increasing momentum at the state level to adopt and expand Child Tax Credits. Today ten states are lifting the household incomes of families with children through yearly multi-million-dollar investments in the form of targeted, and usually refundable, CTCs.
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blog July 22, 2022 Legislative Momentum in 2022: New and Expanded Child Tax Credits and EITCs
State legislatures across the country made investments in their future, centering children, families, and workers by enacting and expanding state Earned Income Tax Credits (EITCs), Child Tax Credits (CTCs), and… -
July 13, 2022 Abortion-Restricting States Do Least for Children
Lawmakers have passed laws in 22 states that either immediately or soon will greatly restrict women’s rights to decide whether and when to have children. These states have some of the worst tax, spending and labor market policies for families in the U.S.
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brief October 21, 2021 Boosting Incomes and Improving Tax Equity with State Earned Income Tax Credits in 2021
The EITC benefits low-income people of all races and ethnicities. But it is particularly impactful in historically excluded Black and Hispanic communities where discrimination in the labor market, inequitable educational systems, and countless other inequities have relegated a disproportionate share of people to low-wage jobs.
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blog September 14, 2021 New Census Data Highlight Need for Permanent Child Tax Credit Expansion
The status quo was a choice, but the Census data released today shows that different policy choices can create drastically different outcomes for children and families. It is time for our state and federal legislators to put people first when it comes to recovery.
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blog July 23, 2021 DC Exemplifies Trend of Tax Justice Victories on the Ground Despite Distractions in the Sky
This month, we watched billionaire space-racers with skyrocketing fortunes literally rocket themselves into the sky to look down on us from the largest gap they could put between themselves and… -
July 7, 2021 The Child Tax Credit in Practice: What We Know About the Payoffs of Payments (Webinar)
Join us for a discussion on why tax credits like the Child Tax Credit (CTC) expansion are good economic policy. You’ll hear from anti-poverty experts on why Congress should extend the policy beyond 2021 and what we can learn from an initiative providing low-income mothers in Jackson, Miss., $1,000 cash on a monthly basis, no strings attached. From theory to practice and what it means for American families, this CTC webinar will provide a unique angle through which to view this transformative policy.
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blog June 28, 2021 State-Level EITC Victories in 2021
A growing group of state lawmakers are recognizing the extent to which low- and middle-income Americans are struggling and the ways in which their state and local tax systems can do more to ensure the economic security of their residents over the long run. To that end, lawmakers across the country have made strides in enacting, increasing, or expanding tax credits that benefit low- and middle-income families. Here is a summary of those changes and a celebration of those successes.
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blog May 13, 2021 Nearly 20 Million Will Benefit if Congress Makes the EITC Enhancement Permanent
Overall, the EITC enhancement would provide a $12.4 billion boost in 2022 if made permanent, benefiting 19.5 million workers. It would have a particularly meaningful impact on the bottom 20 percent of eligible households who would receive more than three-fourths of the total benefit. Forty-one percent of households in the bottom 20 percent of earners would benefit, receiving an average income boost of 6.3 percent, or $740 dollars.
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blog April 21, 2021 An EITC to Lift Up Young Workers
Young workers are confronting a harsh economic reality filled with student loan debt and far too few good-paying jobs. The pandemic reinforced this group’s long history of not receiving proper benefits, such as health insurance, from their employers. They also are often overlooked when it comes to policies that promote economic wellbeing. The federal Earned Income Tax Credit (EITC), for example, is a glowing success story. It lifted 5.8 million people out of poverty in 2018, including 3 million children. But a key shortcoming of the federal EITC: working adults without children in the home receive little to no benefit.
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blog February 16, 2021 EITC Enhancements for States to Consider in 2021
While the federal EITC provides a great deal of support for families with children, its impact is limited for those without children or who are not raising children in their homes. Childless workers under 25 and over 64 have for far too long received no benefit from the federal credit. And workers aged 25 to 64 have received very little value from the existing credit (the maximum credit is much smaller and the income limits more restrictive). The federal EITC’s meager benefits for just some childless adults lead to an inequitable outcome: the federal income tax system—which is ostensibly based on ability-to-pay—taxes some impoverished, childless adults deeper into poverty.