A refundable state earned income tax credit of at least 10 percent of the federal credit is one of the five most effective policies a state can implement to ensure children get off to a healthy start and thrive, and that promote greater equity in child wellbeing.
The state earned income tax credit (EITC) is a tax credit for low-income workers, typically calculated as a percentage of the federal EITC. The value and administration of the state EITC is determined by each state, including whether the state credit is refundable (providing a refund to households even in the absence of tax liability).
The most rigorous research studies show that a state earned income tax credit:
| IMPACT OF STATE EARNED INCOME TAX CREDIT | EVIDENCE OF IMPACT |
Promotes healthy births |
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Reduces racial disparities in birth outcomes |
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Increases a family’s economic security |
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Boosts maternal labor force attachment |
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Visit the Clearinghouse for the comprehensive evidence review on State Earned Income Tax Credit.
The prenatal period to age 3 is the most sensitive and rapid period of growth for the brain and body. State policy choices have a substantial impact on the wellbeing of infants, toddlers, and their parents, and on promoting equity among children. See the Prenatal-to-3 State Policy Roadmap for more information on the most effective policies and strategies states can implement to help children thrive from the start.
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