Montana Budget & Policy Center: A Montana Earned Income Tax Credit (EITC)
ITEP Work in ActionApproximately 83,000 Montanans received the federal EITC in 2014. If Montana established a state EITC, these same working families would receive additional support through boosted wages and would be better able to meet their family’s needs. Additionally, low-income families receiving a state EITC would face a reduced tax burden. In Montana, low-and middle-wage workers pay a greater portion of their earnings in state and local taxes than do higher-income earners (Figure 2). For example, a single mother working full time and earning minimum wage ($16,744 annually) falls within the lowest income range subject to state and local taxes. Under our current tax system, this individual contributes 6.1 percent of her income to state and local taxes, compared to an individual in the highest income range who contributes only 4.7 percent of their earnings in taxes.