One in five Americans is claiming the Earned Income Tax Credit

Today's New York Times offers a sobering look at the use of Earned Income Tax Credit (EITC).

This year marks the first for Connecticut's EITC, which gives eligible filers a credit equal to 30% of the federal.

The Times reports that nationally one in five filers is claiming the EITC, "the country's largest anti-poverty program." Working families with incomes of up to $50,000 can qualify.

"As incomes among the country’s lowest wage earners continue to stagnate," the story adds, "the credit has played a critical role in smoothing the hard edges of an unforgiving labor market for the country’s most vulnerable workers and helping stem the tide of income inequality that has been rising among Americans in recent decades."

The story profiles Karen Spain, who used to earn $85,000 a year and who now counts on her EITC to pay back rent and bills. "We maintain, that’s all we do," she said. "We are just trying to keep our heads above water."

The story also cites a recent Brookings Institute study showing that most people get the EITC for a few years, then stop, and that one in two working families with chidlren got the the EITC once between 1989 and 2006.

 

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