State Earned Income Tax Credit

A state EITC is best understood as a supplement to the federal EITC, which is a refundable tax credit designed to help low-income workers keep more of their wages and reduce poverty. Households with at least one working adult can receive the federal credit as a reduction in tax liability or as a refund if the household has no tax liability or if the credit amount exceeds total taxes owed.² The federal EITC was first enacted in 1975 and has become more generous over time in benefit size and eligibility through several expansions.¹⁷ The credit amount increases as a percentage of income until a plateau income range is reached, after which the credit amount decreases slowly as income continues to rise, until the credit phases out completely. The federal credit schedule varies by family size, marital status, and income (see Figure 1). For example, for the 2021 tax year, a household with one child may benefit from the federal EITC (and state supplement, if applicable) if the family earned $42,158 or less, whereas a family with two children could continue to benefit until an income of $47,915.¹⁷

The American Rescue Plan Act (ARPA), signed into law in March 2021, adjusted the eligibility and phase-in schedules for working individuals with no children in the home (and noncustodial parents) such that the maximum federal benefit is almost three times greater than under previous law (increased from $543 to $1,502—see Figure 1).

Figure 1: Federal EITC Structure by Number of Children and Household Income, as of 2021. Reprinted with permission from the Tax Policy Center.¹⁷

Beginning in 1986 with Rhode Island, a growing number of statesⁱ (now 29ⁱⁱ) have chosen to build on the federal EITC to offer their own tax credits to offset state and local tax liability, and 23 of those states provide refunds.^30,46 State EITCs are typicallyⁱⁱⁱ calculated as a percentage of the federal benefit an eligible family receives. If a state chooses to implement a nonrefundable EITC, the credit can eliminate state tax liability but cannot pay refunds in the absence of tax liability. Some states do not have a state income tax at all, and therefore may find alternative ways of paying for and administering state EITCs. Washington will offer state EITC benefits beginning in 2023, for tax year 2022, despite not having a state income tax, and the state will instead fund the EITC through other revenue streams.⁴⁹

Who Is Affected by State EITCs?

Most Beneficiaries of the Federal and State EITCs are Families with Children

A small credit is available to workers without dependents and to noncustodial parents, but it is more difficult to qualify for the EITC as an adult without custodial children, and as a result, 97 percent of benefits go to families with children in the home, including many single-parent families.⁴⁰ New York and the District of Columbia are the only states that offer an enhanced state credit to qualifying noncustodial parents rather than offering them the same benefit that workers without children receive.^15,16

Benefits for Workers With No Children in the Home Were Recently Expanded

The 2021 American Rescue Plan Act (ARPA) temporarily increased the generosity of the federal EITC for workers with no children as well as for noncustodial parents (for 1 year, with the possibility of an extension). ARPA raised the maximum annual benefit for such workers and raised the income eligibility ceiling from $16,000 to over $21,000 per year.³³ ARPA also expanded the credit to reach workers ages 19 to 24 who are not full-time students and to people over age 65, who were previously excluded. Tax filers with qualifying children were not subject to these age requirements even prior to ARPA.⁴⁰ This expansion is expected to benefit over 17 million workers without children in the home in the US.⁵⁰ Because of the direct link between the state and federal EITCs in 25 states,^iv a total of 4.6 million households are expected to see a state EITC boost of $153 on average as a result of the temporary ARPA expansion to the federal credit.⁴⁶

States Can Expand Their EITCs to be More Inclusive of Workers With Various Immigration Statuses

The federal EITC is only available to workers with a Social Security Number and workers whose spouses (if filing jointly) and dependent children have a Social Security Number as well.³⁶ Almost all states have the same policy as the federal EITC for their credits, which means that many immigrants are excluded from the benefits, even if they work and pay taxes. Five states (California, Colorado, Maine, Maryland, and New Mexico) currently extend EITC eligibility to filers with an Individual Taxpayer Identification Number or ITIN, which means that workers who are undocumented or otherwise ineligible for a Social Security Number may still claim EITC benefits if they meet other criteria.^23,41,44,52 Washington and Oregon passed legislation in the past year to extend eligibility to filers with an ITIN, and their policies will go into effect for tax year 2022.⁵³

State EITCs Offer Much Smaller Benefits Than the Federal Credit

The Tax Policy Center reported that the federal EITC will provide $68.2 billion in tax credits to families with children in 2021, with $2.3 billion benefiting workers without children.²⁹ The credit typically helps to lift up to 6 million people out of poverty in a given year, including 3 million children.²⁹ The average federal EITC amount received per tax filer was $2,476 in 2019, according to the National Conference of State Legislatures (NCSL).³⁰ Average state receipt is not reported in a central national source, given differences in administration across states, but a 2021 study (using data from 1995 to 2015) found that the average state amount was approximately $265.^QQ Given that many states set their EITCs at approximately 10 percent of the federal credit, this figure is consistent with the federal average reported by NCSL.

Increasing Uptake Remains a Challenge

Policymakers and advocates for low-income populations continue to try to maximize EITC uptake among eligible families and individuals. Approximately 20 percent of people who qualify for the federal credit (or 5 million people per year) do not claim it, missing out on approximately $1,554 in benefits each, on average.²⁷ The most common reason, which applies to 64 percent of eligible nonclaimants, is that these individuals do not file a tax return at all. Some states and cities have adopted requirements for employers to notify their workers about the EITC to increase take-up, but some researchers have found that in addition to outreach, the most effective way to boost participation is to increase the use of assisted preparation methods during tax season, such as software or professional tax-filing support.²⁷ Making tax filing more seamless overall may support many of the people who miss out on the EITC simply because they do not file. This approach may also help families attain other tax-based benefits, such as the child tax credit.^v

The Rate of EITC Receipt Varies Across Racial and Ethnic Groups

The rate of EITC receipt (without taking eligibility into account) varies across racial and ethnic groups. According to the Center on Budget and Policy Priorities, 9 percent of all White, non-Hispanic women (filers and spouses) receive the EITC, whereas 21 percent of Black women and 21 percent of Latina^vi women receive the credit.³⁷ In addition, 12 percent of Asian/Pacific-Islander women and 23 percent of Native American women receive the EITC.

Uptake of the EITC among eligible families is unequal across racial and ethnic groups as well. Research demonstrates that Hispanic families have lower EITC uptake rates (46% of eligible families with children receive the credit) than non-Hispanic White families (55%) and Black families (58%).²⁴ Scholars suggest that some Hispanic families may face language or administrative barriers or may fear immigration enforcement, and these factors may deter uptake even when families are fully eligible.²⁴ Outreach to these populations is important to maximize uptake and ensure the benefit reaches those families who are entitled to it.

As described above, state policy choices can have a significant impact on the receipt and effectiveness of the EITC for various populations. Certain policy decisions, such as greater access for immigrants of various legal statuses, greater tax preparation outreach, and greater access for noncustodial parents may increase equity and improve outcomes for families.

What Are the Funding Options for State EITCs?

State EITCs are typically financed through state income and sales taxes and general fund dollars. States can also use alternative funding sources for an EITC, such as Temporary Assistance for Needy Families (TANF) block grant Maintenance of Effort (MOE) funds.³ If a state does not have an income tax, it may find alternative ways to fund or structure its credit. For example, Washington’s EITC, called the Working Families Tax Credit, will not be tied to a percentage of the federal credit and instead will provide between $300 and $1,200 depending on family size and income, beginning in 2023.⁴⁹ This alternative structure allowed the state to reduce administrative costs from an estimated $61.3 million to $23.7 million, which helped the EITC gain greater legislative support.⁴⁹

The Center on Budget and Policy Priorities (CBPP) developed a tool for states without their own EITCs to determine how much it would cost to offer a credit (excluding administrative costs, such as developing new tax forms).³¹ CBPP suggested that states use past years’ Internal Revenue Service (IRS) data on receipt of the federal credit to estimate how much a state credit would cost at various levels, such as a 5 percent, 10 percent, or 20 percent state credit, with some adjustments for the likelihood that not all federal claimants will claim the state credit when it is first implemented, even if eligible. For example, based on 2017 IRS data, West Virginians are expected to receive $392 million in federal EITC benefits in 2021, and if West Virginia were to implement a refundable state EITC at 10 percent of the federal credit, it would cost $35 million based on CBPP’s tool.³¹

Analyses show that the EITC’s administrative costs are relatively low compared to other means-tested programs; for example, in Fiscal Year 2018, federal data show that the EITC’s overhead costs were 1 percent of total benefits paid out, compared to 9 percent for the Supplemental Nutrition Assistance Program (SNAP) and 8 percent for Supplemental Security Income (SSI).³⁴ Given that most state credits are calculated as a percentage of the federal credit, administrative costs for states are typically under 1 percent as well.³⁵ The EITC is one of the most cost-effective anti-poverty policies in the US.

1. State counts include the District of Columbia.
2. The count of 29 reflects those states that have adopted and implemented a state EITC as of October 1, 2021 (28 and DC). Additional states, including Washington and Missouri, have adopted a state EITC into law but will not provide benefits until 2023 (for tax year 2022).
3. California and Washington have unique structures distinct from that of the federal credit, and Minnesota calculates its credit based on a percentage of income rather than a percentage of the federal credit.39 States vary in the extent to which their tax codes automatically adopt federal tax changes; some incorporate federal changes on a rolling basis (known as rolling conformity), other states on a fixed date schedule (static conformity), and still others conform more selectively to the federal tax code.
4. According to the Urban Institute, “Three states with EITCs (California, Indiana, and Wisconsin) will not see automatic increases, because their state credits are not set at a percentage of the federal credit. Minnesota will see only minor changes in eligibility (but no change to its maximum credit) as a result of expanding access to the credit to younger and older people.”⁴⁶ (p. 1). Wisconsin’s EITC structure offers differing credit phase-in rates based on the number of children.
5. In June 2021, the Biden administration set up an online portal for nonfilers to sign up to receive the expanded child tax credit, because families with no earned income are still eligible for the credit. In this way, the child tax credit differs from the EITC.⁴⁸
6. This report used “Latino/a” rather than Hispanic.

Because the credit is only available to low-income working individuals, the EITC may incentivize labor force participation and increase earned income. The additional wages from more hours of work, in combination with the after-tax income from the credit itself, may help lift families out of poverty. Childhood poverty is associated with increased adversity and parental stress, which can negatively affect early brain development and reduce the quality of relationships between parents and children.¹ Poverty reduction through the EITC may relieve parental stress,^I improve parent and child health,⁴ and change parent health behaviors such as smoking.⁶ The EITC may positively influence health and social outcomes through increased spending on nutritious foods, medical care, reliable transportation, safe housing, and other basic needs. Increased labor force participation as a result of the EITC may also increase access to employer-sponsored health insurance.⁷

The federal EITC has been studied for longer than state credits, and many studies examine the combined impacts without separate analyses of state credits. Research exploring the added value of state credits, and particularly a refundable credit of 10 percent or more of the federal credit, has grown in recent years. Findings support the effectiveness of a state EITC as a policy to amplify the effects of the federal credit to improve birth outcomes and strengthen the economic security of families with infants and toddlers.

The research discussed here meets our standards of evidence for being methodologically strong and allowing for causal inference, unless otherwise noted. Each strong causal study reviewed has been assigned a letter, and a complete list of causal studies can be found at the end of this review, along with more details about our standards of evidence and review method. The findings from each strong causal study reviewed align with one of our eight policy goals from Table 1. The Evidence of Effectiveness table (Table 2) displays the findings (beneficial, null,^vii or detrimental) associated with state EITCs^viii for each of the strong studies (A through AAA) in the causal studies reference list. For each indicator, a study is categorized based on findings for the overall study population; subgroup findings are discussed in the narrative. The Evidence of Effectiveness table also includes our conclusions about the overall impact on each studied policy goal. The assessment of the overall impact for each studied policy goal weighs the timing of publication and relative strength of each study, as well as the size and direction of all measured indicators.

Of the 53 causal studies included in this review, 14 examined how outcomes differed by race or ethnicity (beyond simply presenting summary statistics or controlling for race/ethnicity).^ix Where available, this review presents the analyses’ causal findings for subgroups by race/ethnicity and other aspects of variation, such as family structure, age, or citizenship status. A rigorous evaluation of a policy’s effectiveness should consider whether the policy has equitable impacts and should assess the extent to which a policy reduces or exacerbates pre-existing disparities in economic and social wellbeing.

Table 2: Evidence of Effectiveness for State EITCs by Policy Goal

Access to Needed Services

By increasing income, the EITC is expected to promote greater access to health care, including prenatal care.^J However, four studies^x that examined the impact of state EITCs on the use of prenatal care found overall mixed results that did not reach statistical significance, with the exception of one study that found a negative effect.^CC A 2017 study using data from 1994 through 2013 examined both the generosity and refundability of state credits and found mostly null impacts on accessing prenatal care in the first trimester, with a significant increase of 4.8 percentage points only in states with a low, nonrefundable EITC^xi compared to no EITC.^J A 2019 study of DC’s credit used data from 1990 through 2015 and found a reduction of approximately 7 mothers receiving first-trimester prenatal care for every 100 live births when the credit increased from 10 percent to 25 percent of the federal EITC.^CC The authors posited that women may have had less time to seek prenatal care if they worked more as a result of the EITC.^CC There was no significant effect of the initial implementation of the credit at the 10 percent level, or the increase from 25 to 35 percent of the federal EITC, so the reason for this result is not clear.

A third study found no significant link between New York’s EITC and prenatal care use, but the authors cautioned that this result may have been affected by missing data on this outcome for many of the zip codes involved in the study.^Q In addition, the analysis was limited to New York City residents, so the results may not be generalizable to other geographic areas. A fourth study found no significant impact of the EITC on the month of a mother’s first prenatal care visit.^YY This study also found null impacts on well-child visits in the first month of a child’s life.

Another study, using data from 1993 through 2016, examined the effects of greater EITC benefits on access to health coverage and medical care.^I The authors found that a $1,000 increase in the maximum EITC credit did not lead to a significant change in the likelihood of being insured, but the increase did lead to a 1.1 percentage point decline in avoiding a doctor’s visit due to cost (for married mothers) and a 0.9 percentage point decrease among unmarried mothers. Interestingly, the likelihood of having visited a doctor at all in the past year did not significantly change for unmarried mothers, despite the reduction in reporting cost as a barrier. This finding indicates that other barriers (time constraints, work schedules, transportation, child care) may still prevent health care access even when income increases. When the authors investigated the effects by race and marital status, they found that among married mothers, those who were White saw no significant benefit for doctor visits, whereas non-White^xii married mothers saw a 2.2 percentage point reduction in avoiding doctor visits because of cost (representing a boost in access). The results were reversed among unmarried mothers; for that group, White mothers saw a 1.5 percentage point reduction in reporting cost as a barrier to doctor visits, whereas non-White mothers did not see a significant effect.

A 2020 study using data from 1968 through 2017 found that a $100 increase in the maximum value of state and federal EITC benefits reduced the likelihood of being uninsured (from birth to age 18) by 0.2 percentage points.^L The authors concluded that the EITC, through incentivizing mothers’ employment, has a positive impact on children’s health insurance coverage even after accounting for any potential loss in public insurance eligibility because of increased income. Results are inconsistent across studies. A 2016 study using data from 1992 through 2006 found no effect of a $100 increase in the state EITC value on the likelihood of health insurance coverage for children ages 0 to 5, and no significant impact on the likelihood of a doctor or dentist visit in the past 12 months.^K The 2016 study used an older data set, analyzed a sample focused on less-educated workers, and examined state EITCs alone rather than the combination of the state and federal credits, among other differences in study design, which might account for the disparate findings.

Parents’ Ability to Work

Research on the federal EITC has found that its poverty-reduction effects can be attributed in part to an increase in women’s labor force participation.⁹ One of the first and most widely cited studies to establish the EITC’s effect on women’s labor force participation was a 1996 study that found that after the 1986 Tax Reform Act expanded the federal EITC, the credit was linked to a 2.8 percentage point increase in the labor force participation of single women with children relative to single women without children, from a base rate of 73 percent.¹⁰ In addition, a study with a sample of over 86,000 unmarried women estimated that the 1993 federal EITC expansion boosted the probability of working by 5 percentage points for unmarried mothers with two or more children (compared to a control group of women with no children), with the largest effects for mothers who had a high school degree or less.¹¹ A study of the federal EITC’s effects in California found that among single parent families who had ever used welfare, the EITC had a significant positive influence on labor force participation—in particular, EITC expansions accounted for 11.8 percent of the average increase in employment from 1991 to 2000 in this population, and explained 77 percent of the difference in employment increases between families with two or more children and families with one child.¹²

Less research on the state EITC’s influence on labor force participation exists; most studies of state EITCs examine the effects of the combination of federal and state credits. The existing research suggests that this combination has a positive effect on women’s workforce participation, with a strong influence on single mothers with lower education levels.^11,E,U

The EITC’s employment effects may differ depending upon where a family’s income falls along the benefit schedule—whether in the phase-in, plateau, or phase-out range as depicted in Figure 1. Each additional dollar of earned income garners a smaller and smaller benefit along the phase-out portion, so the incentive to work more may be weaker.

A 2020 study used data from 1989 through 1995 to examine the effects of the federal and state credits and found that among single women with a high school degree or less, a $100 increase in the maximum combined credit had a positive effect on employment.^U In particular, the credit “increased the number of weeks worked in a year by 0.83 weeks and reduced year-to-year exit among single women who were previously employed by 2.5 percentage points” (p. 42).^U The author suggested that the EITC may have a stronger effect on keeping individuals attached to the labor force rather than inducing new entrants into the workforce.

A simulation study examining the state credit in New York also projected a positive employment effect, but in this case, benefits were found for new entrants into the workforce. In particular, the authors used income data from 2004 and estimated that an increase in the New York State EITC from 30 percent to 45 percent of the federal credit would result in up to 21,363 single mothers^xiii newly entering the workforce.^W The New York credit remains at 30 percent of the federal benefit.

A 2011 study using data from 1997 through 2006 found that a 10 percent state EITC increased employment among single mothers by 2.1 percentage points compared to ineligible single women with no children,^GG with a greater effect (2.9 percentage points) for single mothers with no more than a high school degree. When the authors examined Black and Hispanic mothers, the effect was similar to the overall impact (2.1 percentage points) but was not statistically significant. However, the impact on employment was greatest for Black and Hispanic mothers when the authors examined the interaction of a 10 percent EITC and 10 percent increase in the minimum wage (a 3.6 percentage point increase in employment).^GG

A 2010 study using data from 1980 through 2002 found that living in a state with an EITC boosted the likelihood of mothers’ employment (for at least 1 week per year) by 19 percent,^B and a 2019 study using data from 1990 through 2016 found that a $1,000 increase in the maximum EITC amount (federal and state) boosted single mothers’ participation in the labor force by between 6 and 9 percentage points.^E

A 2020 study using data from 1997 through 2008 found that a 10 percent state EITC increased employment by 2 percentage points for parents who had at most a high school degree, and the presence of a state credit increased participation in the federal EITC as well.^WW A second 2020 study, using data from 1990 through 2016, found that unmarried mothers with infants and toddlers (under age 3) were 9 percentage points more likely to work with a $1,000 increase in average EITC benefits (including federal and state credits).^C Mothers who worked spent 3.4 more hours at their jobs each week and were 6.6 percentage points more likely to work full-time.^C The study also found that for each additional $1,000 in average EITC benefits, the use of formal, center-based child care arrangements increased by 11 percentage points for infants and toddlers, and overall time spent in child care increased by 9.5 hours per week. The authors found a 20 percentage point increase in the use of informal care arrangements (e.g., neighbors, friends) relative to no increase in EITC generosity. These findings show that because the EITC can increase mothers’ time spent working, the credit also increases use of nonparental child care in various settings.

A major 2019 report by the National Academies of Sciences, Engineering, and Medicine (NASEM) estimated the extent to which various federal economic support policies may reduce family and child poverty, and two EITC policies were simulated in the study.^ZZ The first policy was modeled on a proposal developed by the Children’s Defense Fund in 2015:

To increase the anti-poverty impact of the EITC, CDF increased the rate at which the credit phases in from a range of 34-45 percent (depending on the number of children) to a range of 68-79 percent. We also increased the maximum credit while keeping the rate at which the credit phases out the same (to keep marginal tax rates the same) for nearly all filer types. These changes increase the EITC for the lowest income families and somewhat lessen the marriage penalty. (p. 40)⁴³

The NASEM analysis found that this modification of the federal EITC, with ramifications for the state supplement as a result, may boost employment by approximately 304,000 new jobs, increase net earnings by approximately $5.7 billion, and reduce child poverty by 1.2 percentage points.^ZZ

Meanwhile, the second EITC policy change would boost the credit phase-in and phase-out rates by 40 percent, and this reform was estimated to increase net earnings by $9.5 billion, increase employment by 771,000 new jobs, and reduce child poverty by 2.1 percentage points. The first EITC reform would reduce net government spending on public assistance programs by $1.2 billion, and the second reform by $2.5 billion. Both EITC reforms were estimated to have the greatest poverty-reducing impacts for Black children, children with single mothers, and children with mothers under age 25 (see Table 5-1, p. 164 of the NASEM Report).^ZZ

A 2021 study using data from 1990 through 2017 found that a $1,000 increase in the maximum EITC amount increased average annual weeks worked by 0.61 weeks, employment by 0.6 percentage points, and earnings by $558 among women ages 19 to 64, and this increase reduced public assistance receipt by $243 per household.^Z The authors ran a number of alternative models and found that these results held true whether they defined the maximum EITC “as federal, state, or federal plus state” (p. 10).^Z

Four additional studies, all published in 2020 or 2021,^xiv found positive employment effects when they examined the impacts of increased state and federal credits. One of the papers found that a $1,000 increase in maximum EITC payments, including both federal and state credits, led to an increase in single mothers’ employment of 2.9 to 3.3 percentage points relative to women with no children.^LL Another study found similar effects; a $1,000 increase in maximum total state and federal EITC payments was estimated to boost single mothers’ labor force participation by 4.1 percentage points, their weekly work hours by 1.6 hours, and their pre-tax earnings by $2,372 annually.^MM The study also examined how greater EITC generosity affected time invested in children; results are discussed in the Nurturing Child-Parent Relationships section of this review.

A third study found that an increase of $1,000 in the maximum EITC, including federal and state benefits, did not lead to a statistically significant increase in the likelihood of employment for unmarried women with a high school degree or less in the year after their first child’s birth.^VV The results were in the beneficial direction, however. Finally, a fourth study found that a $100 increase in the maximum value of state and federal EITC benefits led to small but significant employment increases for mothers: a 0.3 percentage point increase in the likelihood of mothers’ employment, a boost in annual weeks worked by 0.14 weeks, and 3.04 additional annual hours worked (with a mean of 839.4 total hours per year).^L

Not all studies show positive employment impacts. A study using Census data from 2000 and 2010 compared women in Wisconsin to women in states without a state EITC and found null effects on employment,^X and a study of all federal and state EITC reforms concluded that the only expansion that independently influenced employment, separate from the effects of welfare reform and other economic factors, was the 1993 federal reform.^Y A study using a natural experiment method across state borders found null effects on local employment and wages, but the authors cautioned that their study did not examine poverty, which in their view is the key goal of state EITCs.^DD They also speculated that the credit levels may have been too low to affect the examined outcomes, and that a county-level analysis of the entire state border, rather than just the metropolitan and urban areas, may have shown different effects.

A 2019 study using data from 1993 through 2016 found that although expansions in the federal credit were linked to increased employment for single mothers, the state credit was too small to have a significant additional effect when it was analyzed alone.^I A study using data from the Fragile Families and Child Wellbeing study examined the impacts of various social welfare policies on women’s experiences with intimate partner violence, and employment was measured as a potential mechanism.^SS The study found no significant links between state EITCs and women’s employment.

Finally, another study examined the impact of federal and state credits on the long-run employment and earnings of mothers when they reached age 40.^S The direction and significance of results varied considerably depending on the age of children at exposure (under or over age 6) and marital status of mothers. For example, the authors found that for unmarried women with older children, a $1,000 increase in the federal credit and a $200 increase in the state credit did not have statistically significant effects on employment probability and earnings, but significantly boosted annual hours worked by 190 hours (at age 40). For married mothers, the effects were a 36.1 percent decrease in earnings and 277 fewer hours (both significant). The results were not significantly different for Black and non-Black^xv women in the authors’ analysis, but the directions of the coefficients for married Black women with young children (under age 6) were positive rather than negative as they were for married White women.

When the authors in this study examined the effects for a single year (rather than the cumulative effects from ages 22 to 39), and by age of children, they found that the credit significantly boosted earnings (by 2.2%) and annual work hours (by 15.16 hours) for single mothers with children ages 6 and older.^S For mothers of younger children (including infants and toddlers), the estimates were not significant and are therefore reflected as null in Table 2 of this review.

Sufficient Household Resources

The federal and state EITCs have been shown to reduce poverty rates among low-income families, but the federal credit tends to have a greater impact on poverty than the state supplement when analyzed separately. One study found that the 1993 federal EITC expansion reduced poverty among families headed by single women by 8.4 percentage points for each additional $1,000 in the federal credit, but the effects were greatest between 75 and 150 percent of the federal poverty level, and smaller for families in more severe poverty.¹⁴ The authors suggested that the credit had a smaller effect on families below 75 percent of the federal poverty level because such families were less attached to the labor market in the first place, and the credit therefore had a weaker work-incentive effect.

Evidence shows that state EITCs contribute to poverty reduction as well, although the impact of state EITCs on earnings is more mixed. One study found that states with a refundable EITC have child poverty rates that are 40 percent lower than other states, holding other state characteristics and policies constant.^A The nonrefundable state EITC, meanwhile, was not significantly linked to reductions in child poverty. This study used data from 1994 to 2003, so its results may be less applicable to current policymaking.

Similarly, a simulation study of the New York State EITC estimated that a 45 percent refund rate (increased from the current level of 30%) may lift between 68,000 and 98,000 individuals out of poverty, given the positive effects on earned income.^W Child poverty was estimated to decline approximately 1 percentage point. Another study with a large, representative sample found that the state credit was associated with 32 percent higher annual earnings for mothers.^B

A 2011 study using data from 1997 through 2006 found that a 10 percent state EITC was linked to a 2.2 percent increase in earnings but had no statistically significant effect on the overall likelihood of a family being above the federal poverty level.^GG The study found a beneficial effect of the EITC on reducing the share of families whose earnings were below 50 percent of the federal poverty level (extreme poverty). The authors also found that the combination of a higher EITC and higher minimum wage had a powerful effect on reducing poverty: A 10 percent EITC, coupled with a 10 percent higher minimum wage (compared to the sample mean), reduced the poverty rate in single-mother families by 2.3 percentage points, and a 25 percent higher minimum wage coupled with the EITC reduced poverty by 3.4 percentage points among this group.

The authors found that although a combination of a higher EITC and state minimum wage enhanced the earnings and employment outcomes of single mothers with children, and had the greatest positive effect for families of color, this combination had an adverse effect on the employment of women with no children and on lower-educated men of color because they were more likely to be ineligible for benefits and potentially had to compete with mothers newly entering the workforce as a result of the EITC’s labor supply incentive effect. The authors underscored the importance of examining subgroup effects when assessing the effectiveness of a policy or the interaction of policies: “Whether the policy combination of a high EITC and a high minimum wage is viewed as favorable or unfavorable depends in part on whom policymakers are trying to help” (p. 712).^GG

A study of the effects of EITC exposure during childhood on later economic outcomes found no significant effects of exposure during ages 0 to 5, but found significant benefits for children ages 13 to 18 on their later circumstances (a 1.3% greater chance of finishing high school, a 4.2% greater likelihood of completing college, a 1% greater likelihood of being employed, and 2.2% higher earnings for each additional $1,000 in EITC exposure).^HH The study found that the EITC boosted contemporaneous family income for children ages 0 to 5: A $1,000 increase in the credit amount led to a $2,000 increase in annual pre-tax family earnings for the youngest children.^HH

A study that focused on infants and toddlers found that a $1,000 increase in average EITC generosity (federal and state benefits) led to an increase of $2,400 in pre-tax earnings, reducing poverty by 5 percentage points (and reducing extreme poverty by 9 percentage points).^C The authors found no significant decreases in poverty for children ages 6 to 17, demonstrating that the EITC may have a particularly important impact on households with the youngest children. Another  study found that each additional $1,000 in maximum EITC benefits increased annual earnings for unmarried mothers by $2,372,^MM and another recent study found that a $100 increase in maximum EITC benefits was linked to a significant $335 increase in pre-tax parental earnings.^L

A rigorous simulation study examined how child poverty would change if every state were to adopt Wisconsin’s generous 43 percent state EITC rate^xvi (reduced to 34% in 2011) for all families.^KK The authors found that this policy would reduce child poverty by up to 1.2 percentage points overall, and by 1.5 percentage points in states with the highest child poverty rates. In addition, children in poverty would see a 4.1 percent increase in their resources-to-needs ratio. The study also simulated policy changes in the Supplemental Nutrition Assistance Program (SNAP), state child tax credits (CTC), and Temporary Assistance for Needy Families (TANF) and found that state EITCs would have the greatest poverty-reduction effect for children.

A study of DC’s EITC found a positive, significant increase of approximately 4 percent for the pre-tax earnings of single mothers when a 40 percent DC credit was combined with the federal credit.^P

Another study using nationally representative data on women ages 22 to 39 found that the EITC had positive but statistically insignificant 1-year effects on the employment and earnings of mothers with children under age 6, although significant effects were found for some subgroups (such as mothers who gave birth to any children between ages 22 and 24, or mothers with children age 6 or older).^S

A study of a large sample of single mothers found that a $1,000 increase in the federal and state combined credit was linked to a $700 increase in savings account balances; however, when analyzed separately, state EITCs alone did not significantly increase savings.^D The study also found null effects on earnings and household debt.

Another study of single mothers found that an additional $1,000 in the combined federal and state credits was linked to a 3.9 percentage point reduction in the odds of being cost-burdened by housing^xvii and a 5.2 percentage point reduction in being severely cost-burdened.^E In addition, the EITC was linked to a 2 percentage point reduction in crowded housing, defined as more than one person per room. The study found insignificant (0.1 to 0.6 percentage points) reductions in the likelihood of being evicted or experiencing homelessness, but found positive, significant impacts on earnings (between a $2,400 and $2,900 boost in annual pre-tax earnings, depending on whether the authors analyzed the Current Population Survey or American Community Survey data). When the authors examined state EITCs alone, none of the housing outcomes were significant, however.^E

A 2019 study using data from 2006 through 2013 examined how the lump-sum payment of the EITC, as opposed to periodic payments, affects debt and savings.^PP The authors found that relative to ineligible households, EITC-eligible families see significantly lower debt levels during the months around tax filing deadlines compared to the rest of the year (64% lower). The study found that EITC-eligible families accrue debt during the months prior to tax filing time, and many use the lump-sum payment to pay down their balances rather than accumulate savings. The authors suggested that a periodic or biannual payment schedule may better serve these families in smoothing debt balances over the year. The temporary change in the child tax credit to a monthly disbursement schedule (in the American Rescue Plan Act) may offer an opportunity to evaluate the effectiveness of periodic benefits for tax credits, and the results may provide insights applicable to the EITC.

Finally, a 2021 study using data from 1998 through 2016 examined the short-term impacts of the EITC (state and federal) on childhood food insecurity.^XX The authors found that each additional $1,000 in EITC benefits reduced food insecurity by 1 percent of a standard deviation on the US Department of Agriculture’s 10-point Food Security Scale for households interviewed within 3 months of EITC receipt.^XX The effect was not statistically significant for the combination of the state and federal credits, whereas the effect was significant for the federal credit alone. The study did not examine the effect of state EITCs in isolation.

Healthy and Equitable Births

Through increased income, the EITC is expected to promote greater use of health care and reduced stress among low-income women, which may lead to better birth outcomes.^J Although a review of the evidence found mixed impacts on increased use of prenatal care as a mechanism for healthier births, research has demonstrated that state EITCs have positive impacts on birth outcomes, although the effect sizes are generally small. One study of the combined local and state credits in New York City found that higher credits led to a small but statistically significant reduction in low birthweight rates at the community level (specifically, a 15 percentage point increase in the combined credit rates was linked to a 0.45 percentage point reduction in prevalence of low birthweight).^Q

Another study with a large sample of single mothers found that state EITCs led to a 0.5 ounce (16 gram) increase in birthweight.^B Research on DC’s credit expansions over time found beneficial effects ranging from 1.9 to 4.7 fewer low birthweight births per 100 live births and 48 to 104 gram increases in average birthweight (depending on the generosity of the credit; the 104 gram increase was linked to the 40% EITC).^CC The DC study also found an increase in gestation length ranging from 0.12 to 0.43 weeks depending on the level of EITC generosity (between 10% to 40%). Another study of a local EITC in Montgomery County, Maryland, found that the introduction of the EITC reduced the likelihood of low birthweight by 1.9 to 2.4 percentage points among likely eligible mothers (an 18% change).^V

An additional study found small but significant impacts of the EITC on birth outcomes—an increase in birthweight of 27.3 grams and an increase in gestation weeks of less than 0.1 weeks in states with generous, refundable credits (state credit generosity was defined as 10% or more of the federal credit).^J States with less generous or nonrefundable credits still saw significant benefits on these measures, compared to states with no EITCs, but the benefits were smaller in magnitude. The study found no overall significant effect on prenatal care use or health behaviors during pregnancy in those states, and thus the pathway to improved birth outcomes remains unclear. A subsequent analysis by the same authors using the same data found that the improvements were larger in magnitude (37.2 grams and 0.15 gestation weeks) for Black mothers in states with generous, refundable credits compared to the effects for White and Hispanic mothers, indicating that the state credit has the potential to reduce racial disparities in birth outcomes, given that Black infants disproportionately experience low birthweight and preterm birth.^II

A 2019 study using data from 1968 through 1992 found that increasing EITC exposure from birth to age 15 by $1,000 decreased adolescent births; in particular, the incidence of births before age 20 was reduced by 0.6 percentage points or 2 percent.^BB This study also found beneficial effects of childhood EITC exposure on college completion by age 23. Effects were similar for White and Black women up until age 22, after which births and educational attainment for Black women did not differ based on childhood EITC exposure to the extent that these outcomes did for White women.

Finally, another study used cross-state and over-time variation in EITC payments (both federal and state) as an instrument to determine the causal impact of income on healthy births and perinatal wellbeing.^YY The study found no significant causal relationship between the EITC (as an instrument for post-tax income) and outcomes such as birthweight or full-term pregnancy. Coefficients were in the positive direction, but did not meet the threshold for statistical significance. Importantly, the authors noted that they used “income and payment size in the prior year as the predictor variables for children born in January to April of a given year, and values from the current year as the predictor variables for children born in May to December” (p. 446).^YY This approach ensures that the measure of EITC receipt, as the independent variable, would occur prior to the child’s birth.

Parental Health and Emotional Wellbeing

Overall, the evidence shows mixed impacts of state EITCs on caregiver mental and physical health. The only outcomes showing any negative results are smoking^F,CC and obesity (a significant increase in obesity for women, but null for men),^G whereas the other outcomes for this policy goal, including mental health,^I,NN suicides,^AA,EE,RR self-reported physical health, and longevity^H,UU show positive or null impacts.

A 2020 study using data from 1993 through 2016 examined the pathways between the EITC and maternal mental health and concluded that the credit, through increased earnings, was linked to a decrease in poor mental health among mothers.^I More precisely, the authors found that a $1,000 increase in the maximum state and federal credits’ combined value led to a 1.6 percentage point (or 4%) reduction in the likelihood that married mothers reported poor mental health days in the past month, and a 2.3 percentage point (or 4.7%) reduction for unmarried mothers. When findings by race were analyzed within the group of unmarried mothers, non-White mothers saw a 2.5 percentage point decrease in the likelihood of experiencing any poor mental health days in the past month, whereas White mothers saw no significant decrease. When the authors examined the impact of the generosity of state EITCs alone, they found that a 10 percentage point increase in the generosity of the credit (as a percentage of the federal credit) was linked to a 2.8 percentage point reduction in the likelihood of poor mental health days among married mothers, but no statistically significant effect was found for unmarried mothers (although the effect was in the beneficial direction).^I

Another 2020 study, using data from 1993 through 2016, examined the credit’s impacts on adult physical and mental health (among workers with low educational attainment, who are most likely to be impacted by the EITC) and found that each 10 percentage point increase in the generosity of the refundable state EITC was linked to fewer reports of poor physical health (149.6 per 100,000).^NN The authors found that positive impacts on mental health were greatest during the months when tax refunds were received, and the reduction in reports of mental distress during the February, March, and April months was statistically significant (a reduction of 329.7 reports per 100,000). The reduction across the full year was not statistically significant.

A 2021 analysis, using data from 1995 through 2015, sought to identify the impact of state EITCs on adult health, including outcomes such as self-reported general health, psychological distress, and tobacco and alcohol use.^QQ The primary variable explored was the presence or absence of a state EITC, rather than the generosity level of the credit. The findings were null for all outcomes, but were in the positive direction for general health and reduced smoking. The average state EITC amount identified in the sample was $265 per year, and the authors suggested that this amount may have been too small to have a measurable effect on health, in contrast to the federal credit, which amounted to $1,912 on average per eligible participant in the sample. The study examined whether there were differential impacts by race (for Black, White, Hispanic, and “Other”-identified individuals) and found similarly null results.

A related study by some of the same authors sought to identify the short-term effects of state and federal EITCs (within the year of receipt) on the same set of health outcomes, and found null impacts as well.^T The study compared EITC-eligible individuals interviewed in February through April to individuals interviewed from May through January of the following tax year to try to identify the short-term impacts of the credit.

Two additional studies found that a state EITC, and specifically a 10 percent or greater credit, led to a 3 to 4 percent reduction in state suicide rates.^AA,EE One of the studies found a greater positive effect for non-White^xviii and Hispanic individuals compared to White, non-Hispanic individuals (a reduction of 5.3% compared to 3.8%, respectively), but the coefficients were not significantly different.^EE A third study found that each 10 percentage point increase in state EITC generosity led to a 4 percent decrease in suicide attempts and a 1 percent reduction in suicide completion.^RR

Two recent causal studies, and one correlational analysis, have examined the possible effects of state EITCs on domestic violence and intimate partner abuse.^OO,SS,4 The authors hypothesized that less financial stress may improve the quality of relationships, and/or that additional income may allow victims of intimate partner violence to achieve greater economic self-sufficiency and leave abusive relationships. One of the studies found that states with refundable EITCs see lower rates of intimate partner abuse.^SS In particular, “isolation victimization,” in which one partner restricts another from communicating with family and friends, was 45 percent lower in states with an EITC.^SS In addition, the odds of “economic coercion,” in which a partner withholds or demands money from another, were found to be 53 percent lower in EITC states.^SS The second study examined intimate partner homicides only, and found no significant relationship with state EITC generosity. The authors posited that the rarity of this event may have limited the ability to detect a statistical relationship in the data.^OO

A recent correlational study also found no significant relationship between state EITC generosity and intimate partner violence.⁴ The authors discussed the possibility that economic coercion may prevent victims from accessing the benefits in the first place, preventing the benefits from supporting their path to self-sufficiency and independence from abusive relationships. There were no racial or ethnic differences in impacts found in these studies, although the authors had hypothesized that the EITC (and other policies, including higher TANF benefits and a higher minimum wage) may have a greater protective effect for women of color because the additional resources may act as a buffer against the effects of structural discrimination.

Studies have also examined the associations between income and smoking^B,F and between income and obesity,^G using the EITC as an instrumental variable for income, and have found both positive and negative associations. The study on obesity concluded that income from the EITC (an additional $1,000) led to a significant increase in obesity among women of approximately 3 to 4 percentage points, depending on whether work hours were controlled for.^G No significant impact was measured for men.

Two studies on smoking found contrasting results: One found that greater income, as instrumentalized by simulated credit receipt, was linked to a 5 percent lower likelihood of smoking,^B whereas a second study found that higher income led to higher odds of smoking (and smoking more: A 10% increase in income led to an additional 3.4 cigarettes per day).^F The authors suggested that in some cases, the increased income allowed individuals to buy more cigarettes, but in other cases, the increased income reduced stress, which in turn reduced smoking. Another study found that smoking during pregnancy^xix was reduced by 1.6 percentage points with the introduction of an EITC, but only in low-generosity states (less than 10% of the federal credit) with no refund.^J A study of the DC credit found an association with increased smoking during pregnancy at all four generosity levels (10%, 25%, 35%, and 40% credit), but the increase was only statistically significant for the change from a 10 percent to 25 percent credit (an increase of 2.1 mothers who smoked per 100 live births).^CC A 2015 study examined the impact of EITC generosity on alcohol and tobacco consumption during pregnancy and found no statistically significant impact, but results were in the beneficial direction.^YY

Finally, two studies addressed the link between state EITCs and longevity. A study on health-related quality of life and longevity found that individuals in states with their own EITCs had 2.2 additional quality-adjusted life years compared to residents of states without a credit.^H A second study by some of the same authors found that each additional $100 in state EITC supplements led to a 2-week increase in adult longevity.^UU

A study that primarily examined the impact of the 1993 federal EITC expansion for families with two or more children found that the additional income significantly improved parent health.⁷ Heads of households were up to 8.9 percentage points more likely to report being in excellent or very good health after the expansion. The author found that the most likely mechanisms were greater spending on food and a greater likelihood of having health insurance.

Nurturing and Responsive Child-Parent Relationships

Three studies offer evidence for the effects of the EITC on parenting quality and child-parent relationships, but all results failed to reach statistical significance.^L,JJ,MM A 2016 longitudinal study using data from 1986 through 2000 measured the impact of an additional $1,000 in EITC exposure (federal and state) on the quality of the home environment, and the study found no significant impacts at a 2-year follow-up interview.^JJ The study used the Home Observation for Measurement of the Environment (HOME) scale, which includes “objective items scored by the interviewer” such as “whether the home is cluttered” as well as “questions asked directly of the mother” such as “how often the mother reads to the child” (p. 777).^JJ

A 2021 study, discussed above in the Parents’ Ability to Work section of this review, examined how EITC generosity affects the time parents spend with children and the activities they share.^MM The authors used data from 2003 through 2018 and found that each $1,000 increase in the maximum EITC amount (federal and state) reduced the total time that single mothers spent with children under age 4 by approximately 4 hours per week (primarily because of increased work time), but did not significantly decrease “investment time” spent with children—activities such as reading together, providing homework help, or other activities aimed specifically at child development. This finding suggests that children’s development may not be harmed if their mothers work more in response to the EITC’s labor supply incentive, because the time they do spend with children may be more meaningful. Although mothers spent less time on home production, errands, and leisure with children, their time spent on investment activities did not significantly decline. Effects were similar for White and non-White mothers, and were only significant for unmarried mothers.

Another study found that a $100 increase in the maximum annual state and federal EITC benefits between birth and age 18 had no significant impact on the time a child spent with their mother, father, or either parent.^L The coefficient was in the negative direction for time with mother, but in the positive direction for time spent with father and time spent with either parent.

Optimal Child Health and Development

Studies have considered the impacts of state EITCs on a range of child health and safety outcomes, including childhood obesity,^K,L,XX asthma-related hospitalizations,^Q foster care entry,^M,R maltreatment reports,^TT substantiated abuse or neglect cases,^N and abusive head trauma,^O as well as child physical and mental health.^L,FF,JJ,XX

One study found a significant 11 percent decrease in foster care entry for states with a refundable EITC compared to states with no EITC, but the study did not disaggregate results by child age to allow for an examination of prenatal-to-3 outcomes.^R An additional study focusing on foster care found that states with an EITC had 7.4 percent lower foster care entry rates, but this effect was driven by children ages 11 to 20, whereas no significant effect was found for children ages 0 to 5.^M

A 2021 study found a significant impact of refundable state EITC generosity on reducing child maltreatment, and in this case, the results were greatest for the youngest children.^TT The authors used data from 2004 through 2017 and found that each 10 percentage point increase in refundable state EITC generosity led to a 9 percent decline in neglect reports in particular (no significant association was found for physical abuse).^TT The impacts were greatest for children ages 0 to 5 (324 fewer neglect reports per 100,000 children, compared to 201 fewer neglect reports for children ages 6 to 17).

Most other child health outcomes show null or mixed results for children ages 0 to 5. For example, one study found no significant impact of state EITC benefits on obesity for children ages 0 to 5,^K whereas a study examining longer-term outcomes found a 1.3 percentage point decrease in the likelihood of obesity as an adult (ages 22 to 27) after early childhood exposure to the EITC (from ages 0 to 5). ^L This study found a greater effect on reducing obesity for Black and Hispanic children compared to White, non-Hispanic children, but the effects were not significantly different. A 2021 study using data from 1998 through 2016 found no impact of the EITC (including state and federal benefits) on the likelihood of being overweight or underweight (as measured by Body Mass Index), but the study did not disaggregate by child age.^XX This study also found null results for child mental health outcomes^xx in the 3 months immediately following EITC receipt. The study was focused on the short-term effects of the EITC, which is why the results were limited to the 3 months following receipt.

Two 2017 studies found no significant impacts on asthma-related hospitalizations^Q (data from 1997 through 2010) or abusive head trauma^O (data from 1995 through 2013), and a 2003 study found no significant impacts on a variety of abuse/neglect indicators (data from 1990 through 1998).^N The study examining pediatric abusive head trauma found that a refundable state EITC was linked to 3.1 fewer cases of abusive head trauma to infants and toddlers per 100,000 children, but the effect was not significant.^O

Evidence shows the potential for long-term positive impacts of the EITC. A 2020 paper using data from 1968 through 2017 found that likely exposure to more generous EITCs (a $100 or 3% increase in federal and state credits) from ages 0 to 18 was significantly linked to a 1.7 percentage point (2.6%) increase in self-reported “very good or excellent” health in adulthood, with an effect of 1 percentage point for exposure between ages 0 and 5.^L The study found that the effects were largest among families at the lower end of the income distribution (below the 40^th percentile), who are most likely to receive the EITC. The study found null effects for mental health between ages 22 and 27 based on childhood exposure to the EITC, but the coefficients were in the beneficial direction.

A 2019 study, also using data from 1968 through 2017 (from the Panel Study of Income Dynamics), found that prenatal exposure to the EITC (specifically, a $1,000 increase in maximum credit exposure during pregnancy) was linked to a small (less than 0.1 point) increase in the child’s health status in adulthood on a 5-point scale of poor to excellent health, and a child’s likelihood of smoking as an adult decreased as well.^FF Exposure during ages 0 to 5 did not yield a significant benefit, however. In addition, Black and male children did not see the same significant benefits that White and female children did in this study.

The longitudinal 2016 study mentioned in the Nurturing and Responsive Child-Parent Relationships section of this review also examined the effects of exposure to an additional $1,000 in EITC payments (both federal and state) on children’s behaviors. The authors found that the additional payment led to improved scores on the Behavior Problems Index (a 28-item questionnaire with a mean normalized score of 100).^JJ The Behavior Problems Index is only completed by mothers of children age 4 and older, so it does not capture the behavior of infants and toddlers (under age 3) and therefore is not reflected in Table 2.

Finally, a 2015 study using data from 1986 through 2000 examined the causal impact of income (using the EITC as an instrumental variable) on whether children were ever breastfed.^YY The study found null impacts on this indicator. The authors had theorized that reduced stress and anxiety as a result of the extra income may have led to increased breastfeeding, but their data did not confirm this prediction.

7. An impact is considered statistically significant if p≤0.05. Results with p-values above this threshold are considered null or nonsignificant.
8. We present findings from the combination of state and federal credits when a study did not offer a separate analysis of state EITCs. If a study analyzed each credit separately, we present the results for state EITCs.
9. The studies, as labeled in our reference list, are studies I, L, S, BB, EE, FF, GG, HH, II, MM, QQ, SS, VV, and ZZ.
10. Studies J, Q, CC, and YY.
11. The study defined a “low” EITC value as less than 10 percent of the federal EITC, and a “high” EITC as 10 percent or greater. The study found null results for prenatal care in states with a low refundable EITC, high nonrefundable EITC, and high refundable EITC.
12. The study reported results using the category of “non-White” rather than specific races or ethnicities.
13. This review uses “single mothers” or “unmarried mothers” in the discussion of results to correspond with how the authors themselves described their samples.
14. Study L used data from 1968 through 2017; study LL used data from 1971 through 2015; study MM used data from 2003 through 2018; study VV used data from 1995 through 2016.
15. The author reported results for the categories of “Black” and “non-Black” in the paper.
16. This rate only applied to families with three children in Wisconsin, but the simulation tested how child poverty would change if every eligible family with at least one child received this EITC rate. Wisconsin’s rate was chosen as the benchmark because it had the most generous rate from 2010 to 2012, which were the years of the data set used for the simulation.
17. The US Dept. of Housing and Urban Development defines cost-burdened families as those families who pay more than 30 percent of their income for housing, and severely cost-burdened as more than 50 percent.²¹
18. The study did not specifically refer to participants in the sample as Black, but instead used the terms “non-White” and Hispanic.
19. Given the risks that smoking during pregnancy can pose to infants’ health, in addition to that of their mothers, this outcome may also be considered part of the “Healthy and Equitable Births” goal.
20. Children age 3 and under were assessed using the Mental Health Indicator (adapted from the Child Behavior Checklist), and children ages 4 to 17 were assessed using the Strengths and Difficulties Questionnaire from the National Health Interview Survey.

Of the 14 strong studies that examined state (or state and federal) EITCs’ impacts on various outcomes for children and families by race and/or ethnicity, five studies^xxi found significant results suggesting that EITCs had greater positive impacts on subgroups for whom outcomes may have been worse at baseline, and the credit may therefore promote equity by closing gaps in outcomes.

Existing rigorous evidence suggests that state EITCs reduce racial disparities in healthy birth outcomes. In one study, when states with an EITC were compared to states without, Black mothers in EITC states saw a 1.2 percent increase in infants’ birthweight, compared to a 0.9 percent increase among infants with White mothers.^II Hispanic mothers saw a 1.1 percent increase in infants’ birthweight in states with an EITC. In the most generous EITC states (states with a refundable credit of 10% or more of the federal EITC), Black mothers saw significantly larger benefits than White mothers for the likelihood of low birthweight (a 1.4 percentage point decrease, compared to 0.7 for White mothers).^II Given pre-existing gaps in healthy births between Black mothers and mothers of other races, this result demonstrates the potential for the EITC to reduce disparities.

The EITC may contribute to greater equity in other outcomes, as well. One study found that the EITC had a greater impact on promoting high school graduation for Black children and children in single-parent households than other groups (an advantage of 2.4 and 1.7 percentage points, respectively).^HH This outcome does not fall within the prenatal-to-3 period (and exposure was not disaggregated for the infant and toddler period), so the finding is not reflected in Table 2, but it is still an important outcome for children’s long-term success. Another study found that a 10 percent state EITC, coupled with a 10 percent increase in the state minimum wage, had a greater effect on Black and Hispanic mothers’ earnings than for the sample overall (a 14.6% increase, compared to an 8.3% increase for the full sample of mothers ages 21 to 44).^GG

A study examining the EITC’s effect on mothers’ mental health found different effects by race, with non-White women reporting greater reductions in the likelihood of poor mental health in the prior month than their White counterparts.^I To the extent that non-White women face greater mental health challenges than their White peers, this effect may indicate that the credit promotes greater equity in mental health.

Both EITC reforms explored in the NASEM report, discussed previously, were estimated to have the greatest poverty-reducing impacts for Black children, children with single mothers, and children with mothers under age 25 (See Table 5-1, p. 164 of the NASEM Report).^ZZ

One study of the effects of the EITC on intimate partner violence found that although the policy was linked to a reduction in various forms of coercive and abusive relationships, the effects did not differ by race.^SS Another study examining how the EITC affects time spent with children also found no significant differences by race.^MM A study of childhood EITC exposure on later health found greater effects for White, non-Hispanic children than Black and Hispanic children.^L

A 2020 study using data from 1996 through 2014 found that the effects of the EITC on employment and earnings among first-time mothers were null regardless of race, but the coefficients for employment were beneficial for Black, single mothers and detrimental for non-Black single mothers.^VV For married mothers, the directions of the coefficients for employment were reversed.

Overall, beyond the impacts on equitable birth outcomes, more rigorous research is needed to investigate the potential for state EITCs to reduce racial and ethnic disparities in outcomes for children and their parents during the prenatal-to-3 period and beyond. The majority of research examines outcomes by marital status and education level, but not explicitly by race.

21. The studies, as labeled in our reference list, are studies I, GG, HH, II, ZZ.

A recent study of the return on investment for the EITC (federal and state) found that the credit largely “pays for itself” by increasing taxes paid (by $92 per household) and reducing public assistance received (by $243 per household).^Z The analysis found that “states with EITCs gain more from the federal EITC, perhaps because state EITCs independently increase labor supply” (p. 14).^Z In 2017, low-income families received $73 billion in total EITC assistance for a net cost to the government of only $12 billion.^Z In addition, estimates from Moody’s Analytics in 2012 suggested that each $1 spent on the EITC generated $1.24 in economic activity. A more comprehensive analysis of the return on investment is forthcoming.

Through increased labor force participation, higher earnings, and lump-sum credit income, a strong theory of change links the earned income tax credit to reduced poverty and improved outcomes for parents and young children. Research on the federal credit supports these outcomes empirically, whereas a review of the evidence shows that state EITCs have smaller, more mixed effects on employment, sufficient resources, and caregiver physical and mental health, likely because they are smaller credits intended to supplement the federal EITC and its impacts. The evidence does not show a consistent causal link between state EITCs and child health and safety in the short term, although there is some evidence of beneficial impacts on maltreatment reduction and health status when children are in elementary school or older. Research has found consistently beneficial impacts of a refundable state EITC (of 10% or more of the federal credit) on birth outcomes, including the potential to reduce racial disparities in healthy births. In addition, an increase in the maximum value of the combination of the federal and state credits is supported by multiple studies^xii as a way to increase maternal employment, labor force attachment, or household resources.

The research on state EITCs has several gaps to be addressed in future work. First, researchers should work to clarify the theoretical links between the federal and state EITCs and outcomes of interest. Whereas the theory is clear on how the EITC should affect parents’ employment and their earnings, it is less clear what the effects should be on health and birth outcomes and why. Research generally suggests that greater income can promote access to health care, including prenatal care, but the empirical findings on this pathway are mixed, although the results for birth outcomes are positive. Identifying the mechanisms or pathways through which the EITC should impact outcomes for families and children will help to clarify where the EITC is making a significant impact and where it is not, and why.

Another limitation of the research is that many studies examine the combined effects of the federal and state credits and do not separately analyze the contribution of state credits to economic security or other outcomes. In addition, much of the research examines outcomes based on differential eligibility for the EITC rather than measuring outcomes for families who actually receive the credit compared to families who do not. Over time, and to the extent that available data allow such analyses, it will be important to further investigate the barriers to take-up among families and the outcomes associated with receipt of the credit rather than eligibility (or likely eligibility, through proxy indicators such as education or income level).

Research should further examine the impact of state EITCs by credit generosity and refundability. Several studies have shown that more generous, refundable state credits have larger positive impacts,^A,J and research shows that a 10 percent or greater credit is effective for positive birth outcomes, but most studies examine the impacts of an additional $1,000 in total EITC funds rather than examining the optimal state credit level. Further research is also needed to understand how an increase in earnings associated with greater work participation is balanced by reductions in benefits for workers with incomes near the safety net eligibility threshold, to determine whether families are left financially better off overall. Research on whether the EITC is associated with greater use of quality child care, given mothers’ increased work participation, would also be valuable.

Study samples in the EITC literature focus primarily on single mothers as likely recipients of the credit, but future work should expand the scope to consider the impacts on fathers, other custodial caregivers, and noncustodial parents as well. Preliminary findings from a pilot study of an expanded New York City credit for single adults and noncustodial caregivers (up to $2,000 for those making up to $30,000) found that the credit increased employment, reduced poverty, and increased the likelihood of making child support payments by 7.2 percentage points.¹³ Long-term health and economic impacts from the receipt of state credits in childhood should also be studied further, as these longer-term outcomes are relatively new in the literature.

Although we see some evidence of reduced racial disparities in birth outcomes as a result of a refundable 10 percent or greater credit,^II future research should further examine how state EITCs affect existing health and income disparities across race, ethnicity, and socioeconomic status.

22. For example, see studies C, E, U, Z, GG, HH, LL, and MM.

Existing evidence suggests that implementing a state earned income tax credit, and in particular a refundable credit of at least 10 percent of the federal EITC, can amplify the impact of the federal EITC and increase the employment and earned income of lower-income families and individuals with lower educational attainment. The evidence suggests that the credit has the clearest impact on improving birth outcomes, with particularly positive effects for families of color.

As of October 1, 2021, 23 states^xxiv have adopted and implemented refundable state EITCs, and only six states have implemented nonrefundable credits (Delaware, Hawaii, Ohio, Oklahoma, South Carolina, and Virginia). Of the 23 states with a refundable credit, 18 have a credit of at least 10 percent of the federal credit that applies to all eligible taxpayers with children under age 3. The levels of these refundable state credits range from 3 percent of the federal credit in Montana to a maximum of 40 percent in DC and New Jersey (and up to 85% in California, which has a structure distinct from that of the federal credit^xxv).¹⁸ Of the remaining 22 states that have not implemented their own EITCs, nine do not have a state income tax; without this source of funding, states will need to explore other financing options if they choose to implement a credit. Washington does not have a state income tax but plans to finance its state EITC (the Working Families Tax Credit) using general revenue.⁴⁹

Table 3: State Variation in State Earned Income Tax Credits

*Indicates that the state has a refundable EITC which does not meet the threshold of at least 10 percent of the value of the federal EITC for all eligible families with any children under 3.
**Indicates that the state does not have a tax on individual earned income. Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming have no personal income tax at all. New Hampshire and Tennessee have no personal income tax on earned income, though there is tax accessed on some dividends, interest, and other income from investments.
***Missouri and Washington have passed legislation to implement an EITC in future years, but not for tax year 2021, so their EITCs are not reflected in this table.
⁺California’s stated maximum is 85%, but the typical percentage amount varies considerably based on income and household structure, given California’s unique phase-out calculations. Minnesota’s EITC is based on a percentage of income instead of a percentage of the federal EITC. For tax year 2020, this percentage is estimated, on average, to be 39%.
Data as of October 1, 2021. State income tax statutes. For additional source and calculation information, please refer to Methods and Sources.

23. For details on state progress implementing state EITCs, see the state EITC section of the US Prenatal-to-3 State Policy Roadmap: https://pn3policy.org/pn-3-state-policy-roadmap-2021/us/state-eitc/
24. State counts include the District of Columbia
25. California may provide up to 85% of the federal credit for the lowest-income families, but almost all families receive up to 40% of the federal credit and no higher.

Method of Review

This evidence review began with a broad search of all literature related to the policy and its impacts on child and family wellbeing during the prenatal-to-3 period. First, we identified and collected relevant peer-reviewed academic studies as well as research briefs, government reports, and working papers, using predefined search parameters, keywords, and trusted search engines. From this large body of work, we then singled out for more careful review those studies that endeavored to identify causal links between the policy and our outcomes of interest, taking into consideration characteristics such as the research designs put in place, the analytic methods used, and the relevance of the populations and outcomes studied. We then subjected this literature to an in-depth critique and chose only the most methodologically rigorous research to inform our conclusions about policy effectiveness. All causal studies considered to date for this review were released on or before March 31, 2021.

Standards of Strong Causal Evidence

When conducting a policy review, we consider only the strongest studies to be part of the evidence base for accurately assessing policy effectiveness. A strong study has a sufficiently large, representative sample, has been subjected to methodologically rigorous analyses, and has a well-executed research design allowing for causal inference—in other words, it demonstrates that changes in the outcome of interest were likely caused by the policy being studied.

The study design considered most reliable for establishing causality is a randomized controlled trial (RCT), an approach in which an intervention is applied to a randomly assigned subset of people. This approach is rare in policy evaluation because policies typically affect entire populations; application of a policy only to a subset of people is ethically and logistically prohibitive under most circumstances. However, when available, RCTs are an integral part of a policy’s evidence base and an invaluable resource for understanding policy effectiveness.

The strongest designs typically used for studying policy impacts are quasi-experimental designs (QEDs) and longitudinal studies with adequate controls for internal validity (for example, using statistical methods to ensure that the policy, rather than some other variable, is the most likely cause of any changes in the outcomes of interest). Our conclusions are informed largely by these types of studies, which employ sophisticated techniques to identify causal relationships between policies and outcomes. Rigorous meta-analyses with sufficient numbers of studies, when available, also inform our conclusions.

Studies That Meet Standards of Strong Causal Evidence

1. 1. 1. 1. Lim, Y. (2009). Can ‘refundable’ state earned income tax credits explain child poverty in the American states? Journal of Children and Poverty, 15(1), 39–53. https://doi.org/10.1080/10796120802685415
         2. Strully, K. W., Rehkopf, D. H., & Xuan, Z. (2010). Effects of prenatal poverty on infant health: State earned income tax credits and birth weight. American Sociological Review, 75(4), 534–562. https://doi.org/10.1177%2F0003122410374086
         3. Michelmore, K. & Pilkauskas, N. (2020). Tots and teens: How does child’s age influence maternal labor supply and child care response to the earned income tax credit? The University of Chicago Press. (Accepted for Journal of Labor Economics). https://doi.org/10.1086/711383
         4. Jones, L. E. & Michelmore, K. (2018). The impact of the earned income tax credit on household finances. Journal of Policy Analysis and Management, 37(3), 521–545. https://doi.org/10.1002/pam.22062
         5. Pilkauskas, N. & Michelmore, K. (2019). The effect of the earned income tax credit on housing and living arrangements. Demography, 56(4), 1303–1326. https://doi.org/10.1007/s13524-019-00791-5
         6. Kenkel, D. S., Schmeiser, M. D., & Urban, C. (2014). Is smoking inferior? Evidence from variation in the earned income tax credit. The Journal of Human Resources, 49(4), 1094-1120. https://doi.org/10.3368/jhr.49.4.1094
         7. Schmeiser, M. D. (2009). Expanding wallets and waistlines: The impact of family income on the BMI of women and men eligible for the earned income tax credit. Health Economics, 18(11), 1277–1294. https://doi.org/10.1002/hec.1430
         8. Muennig, P. A., Mohit, B., Wu, J., Jia, H., & Rosen, Z. (2016). Cost effectiveness of the earned income tax credit as a health policy investment. American Journal of Preventive Medicine, 51(6), 874–881. https://doi.org/10.1016/j.amepre.2016.07.001
         9. Gangopadhyaya, A., Blavin, F., Gates, J., & Braga, B. (2020). Credit where it’s due: investigating pathways from earned income tax credit expansion to maternal mental health. Health Economics, 29, 975-991. https://doi.org/10.1002/hec.4034
         10. Markowitz, S., Komro, K. A., Livingston, M. D., Lenhart, O., & Wagenaar, A. C. (2017). Effects of state-level earned income tax credit laws in the US on maternal health behaviors and infant health outcomes. Social Science & Medicine, 194, 67–75. https://doi.org/10.1016/j.socscimed.2017.10.016
         11. Baughman, R. A. & Duchovny, N. (2016). State earned income tax credits and the production of child health: Insurance coverage, utilization, and health status. National Tax Journal, 69(1), 103–132. http://dx.doi.org/10.17310/ntj.2016.1.04
         12. Braga, B., Blavin, F., & Gangopadhyaya, A. (2020). The long-term effects of childhood exposure to the earned income tax credit on health outcomes. Journal of Public Economics, 190, 1-15. https://doi.org/10.1016/j.jpubeco.2020.104249
         13. Biehl, A. M. & Hill, B. (2018). Foster care and the earned income tax credit. Review of Economics of the Household, 16(3), 661–680. https://doi.org/10.1007/s11150-017-9381-1
         14. Paxson, C. & Waldfogel, J. (2003). Welfare reforms, family resources, and child maltreatment. Journal of Policy Analysis and Management, 22(1), 85–113. https://doi.org/10.1002/pam.10097
         15. Klevens, J., Schmidt, B., Luo, F., Xu, L., Ports, K. A., & Lee, R. D. (2017). Effect of the earned income tax credit on hospital admissions for pediatric abusive head trauma, 1995-2013. Public Health Reports, 132(4), 505–511. https://doi.org/10.1177/0033354917710905
         16. Hardy, B. L., Muhammad, D., Casey, M. D., & Samudra, R. (2018). EITC expansions, earnings growth, and inequality: Evidence from Washington, DC. University of Kentucky Center for Poverty Research. Discussion Paper Series (1936-9379). http://ukcpr.org/sites/ukcpr/files/research-pdfs/DP2018-09.pdf
         17. Wicks-Lim, J., & Arno, P. S. (2017). Improving population health by reducing poverty: New York’s earned income tax credit. SSM – Population Health, 3, 373–381. https://doi.org/10.1016/j.ssmph.2017.03.006
         18. Rostad, W., Ports, K., Tang, S., & Klevens, J. (2020). Reducing the number of children entering foster care: Effects of state earned income tax credits. Child Maltreatment, 1–5. https://journals.sagepub.com/doi/full/10.1177/1077559519900922
         19. Neumark, D. & Shirley, P. (2020). The long-run effects of the earned income tax credit on women’s labor market outcomes. Labor Economics, 66. https://doi.org/10.1016/j.labeco.2020.101878
         20. Collin, D., Shields-Zeeman, L., Batra, A., Vable, A., Rehkopf, D., Machen, L., & Hamad, R. (2020). Short-term effects of the earned income tax credit on mental health and health behaviors. Preventive Medicine, 139, 1-7. https://doi.org/10.1016/j.ypmed.2020.106223
         21. Wilson, R. (2020). The EITC and employment transitions: Labor force attachment and annual exit. National Tax Journal, 73(1), 11–46. https://doi.org/10.17310/ntj.2020.1.01
         22. Hill, B. & Gurley-Calvez, T. (2019). Earned income tax credits and infant health: A local EITC investigation. National Tax Journal, 72(3), 617–646. http://dx.doi.org/10.17310/ntj.2019.3.06
         23. Schmeiser, M. (2012). Expanding New York State’s earned income tax credit programme: The effect on work, income and poverty. Applied Economics, 44, 2035–2050. https://www.tandfonline.com/doi/abs/10.1080/00036846.2011.558478
         24. Cancian, M. & Levinson, A. (2006). Labor supply effects of the earned income tax credit: Evidence from Wisconsin’s supplemental benefit for families with three children. National Tax Journal, 59(4), 781–800. https://www.jstor.org/stable/41790358?seq=1#metadata_info_tab_contents
         25. Kleven, H. (2019). The EITC and the extensive margin: A reappraisal (No. w26405). National Bureau of Economic Research. https://www.nber.org/papers/w26405.pdf
         26. Bastian, J. & Jones, M. (2021). Do EITC expansions pay for themselves? Effects on tax revenue and government transfers. Journal of Public Economics, 196, 1-21. https://doi.org/10.1016/j.jpubeco.2020.104355
         27. Lenhart, O. (2019). The effects of state-level earned income tax credits on suicides. Health Economics, 28, 1476–1482. https://doi.org/10.1002/hec.3948
         54. Michelmore, K., & Lopoo, L. (2019). The effects of EITC exposure in childhood on marriage and early childbearing. Maxwell School of Citizenship and Public Affairs, Center for Policy Research, Working Paper Series (215). https://ideas.repec.org/p/max/cprwps/215.html
         81. Wagenaar, A., Livingston, M., Markowitz, S., & Komro, K. (2019). Effects of changes in earned income tax credit: Time-series analyses of Washington, DC. SSM Population Health, 7, 1– https://doi.org/10.1016/j.ssmph.2019.100356
         108. Stokan, E. (2019). An estimate of the local economic impact of state-level earned income tax credits. Economic Development Quarterly, 33(3), 170–186. https://doi.org/10.1177%2F0891242419858412
         135. Dow, W., Godøy, A., Lowenstein, C., & Reich, M. (2019). Can economic policies reduce deaths of despair? (No. w25787). National Bureau of Economic Research. http://www.nber.org/papers/w25787
         162. Song, Z. (2019). Long-term health effect of earned income tax credit. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3487069
         189. Neumark, D., & Wascher, W. (2011). Does a higher minimum wage enhance the effectiveness of the earned income tax credit? Industrial and Labor Relations Review, 64(4), 712–746. https://doi.org/10.1177%2F001979391106400405
         216. Bastian, J., & Michelmore, K. (2018). The long-term impact of the earned income tax credit on children’s education and employment outcomes. Journal of Labor Economics, 36(4), 1127-1163. http://doi.org/10.1086/697477
         243. Komro, K. A., Markowitz, S., Livingston, M. D., & Wagenaar, A. C. (2019). Effects of state-level earned income tax credit laws on birth outcomes by race and ethnicity. Health Equity, 3(1), 61–67. https://doi.org/10.1089/heq.2018.0061
         270. Hamad, R., & Rehkopf, D. H. (2016). Poverty and child development: A longitudinal study of the impact of the earned Income tax credit. American Journal of Epidemiology, 183(9), 775–784. https://doi.org/10.1093/aje/kwv317
         297. Pac, J., Garfinkel, I., Kaushal, N., Nam, J., Nolan, L., Waldfogel, J., & Wimer, C. (2020). Reducing poverty among children: Evidence from state policy simulations. Children & Youth Services Review, 115, 1-12. https://doi.org/10.1016/j.childyouth.2020.105030
         324. Schanzenbach, D. W. & Strain, M. (2020). Employment effects of the earned income tax credit: Taking the long view. (No. w28041). National Bureau of Economic Research. https://www.nber.org/papers/w28041
         351. Bastian, J. & Lochner, L. (2021). The EITC and maternal time use: More time working and less time with kids? (No. 27717). National Bureau of Economic Research. http://www.nber.org/papers/w27717 (May 2021 update provided by author via electronic correspondence: https://drive.google.com/file/d/1r_uXspfMrFsM6bfDqjss3g2HhYjd7kUi/view?usp=sharing)
         378. Morgan, E., Hill, H., Mooney, S., Rivara, F., & Rowhani-Rahbar, A. (2020). State earned income tax credits and general health indicators: A quasi-experimental national study 1993-2016. Health Services Research, 55(2), 863-872. http://doi.org/10.1111/1475-6773.13307
         405. Moe, C., Adhia, A., Mooney, S., Hill, H., Rivara, F., Rowhani-Rahbar, A. (2020). State earned income tax credit policies and intimate partner homicide in the USA, 1990-2016. Injury Prevention, 26, 562-565. http://doi.org/10.1136/injuryprev-2020-043675
         432. Jones, L. & Michelmore, K. (2019). Timing is money: Does lump-sum payment of the earned income tax credit affect savings and debt? Economic Inquiry, 57(3), 1659-1674. http://doi.org/10.1111/ecin.12788
         459. Collin, D., Shields-Zeeman, L., Batra, A., White, J., Tong, M., & Hamad, R. (2021). The effects of state earned income tax credits on mental health and health behaviors: A quasi-experimental study. Social Science & Medicine, 276, 1-7. https://doi.org/10.1016/j.socscimed.2020.113274
         486. Morgan, E., DeCou, C., Hill, H., Mooney, S., Rivara, F., Rowhani-Rahbar, A. (2020). State earned income tax credits and suicidal behavior: A repeated cross-sectional study. Preventive Medicine, 145. https://doi.org/10.1016/j.ypmed.2020.106403
         513. Spencer, R., Livingston, M., Woods-Jaeger, B., Rentmeester, S., Sroczynski, N., & Komro, K. (2020). The impact of temporary assistance for needy families, minimum wage, and earned income tax credit on women’s well-being and intimate partner violence victimization. Social Science & Medicine, 266, 1-9. https://doi.org/10.1016/j.socscimed.2020.113355
         540. Kovski, N., Hill, H., Mooney, S., Rivara, F., Morgan, E., Rowhani-Rahbar, A. (2021). Association of state-level earned income tax credits with rates of reported child maltreatment, 2004-2017. Child Maltreatment. http://doi.org/10.1177/1077559520987302
         567. Muennig, P., Vail, D., & Hakes, J. (2020). Can antipoverty programmes save lives? Quasi-experimental evidence from the Earned Income Tax Credit in the USA. BMJ Open, 10, e037051. http://doi.org/10.1136/bmjopen-2020-037051
         594. Shirley, P. (2020). First-time mothers and the labor market effects of the earned income tax credit. IZA Journal of Labor Policy, 10(7), 1-53. https://doi.org/10.2478/izajolp-2020-0007
         621. Neumark, D. & Williams, K. (2020). Do state earned income tax credits increase participation in the federal EITC? Public Finance Review, 48(5), 579-626. https://doi.org/10.1177%2F1091142120945336
         648. Batra, A. & Hamad, R. (2021). Short-term effects of the earned income tax credit on children’s physical and mental health. Annals of Epidemiology, 58, 15-21. https://doi.org/10.1016/j.annepidem.2021.02.008
         675. Hamad, R. & Rehkopf, D. (2015). Poverty, pregnancy, and birth outcomes: A study of the earned income tax credit. Pediatric and Perinatal Epidemiology, 29(5), 444-452. https://dx.doi.org/10.1111%2Fppe.12211
         702. National Academies of Sciences, Engineering, and Medicine. (2019). A roadmap to reducing child poverty. Washington, DC: The National Academies Press. https://doi.org/10.17226/25246
         703. Bollinger, C., Gonzalez, L., & Ziliak, J. P. (2009). Welfare reform and the level and composition of income. In J. P. Ziliak (Ed.), Welfare Reform and Its Long-Term Consequences for America’s Poor (pp. 59–103). https://doi.org/10.1017/CBO9780511605383.004

Other References

1. 1. Shonkoff, J. & Phillips, D. (2000). From neurons to neighborhoods: The science of early childhood development. Washington, DC: The National Academies Press. https://doi.org/10.17226/9824
   2.  Center on Budget and Policy Priorities. (2019). Policy basics: The earned income tax credit. https://www.cbpp.org/sites/default/files/atoms/files/policybasics-eitc.pdf
   3. Johnson, N. & Williams, E. (2011). A hand up: How state earned income tax credits help working families escape poverty in 2011. Center on Budget and Policy Priorities. https://www.cbpp.org/sites/default/files/atoms/files/4-18-11sfp.pdf
   4. Edmonds, A., Moe, C., Adhia, A., Mooney, S., Rivara, F., Hill, H., & Rowhani-Robar, A. (2021). The earned income tax credit and intimate partner violence. Journal of Interpersonal Violence. https://doi.org/10.1177/0886260521997440
   5. Hamad, R., Collin, D. F., & Rehkopf, D. H. (2018). Estimating the short-term effects of the earned income tax credit on child health. American Journal of Epidemiology, 187(12), 2633–2641. https://doi.org/10.1093/aje/kwy179
   6. Averett, S. & Wang, Y. (2013). The effects of earned income tax credit payment expansion on maternal smoking. Health Economics, 22(11), 1344–1359. https://doi.org/10.1002/hec.2886
   7. Lenhart, O. (2019). The effects of income on health: New evidence from the earned income tax credit. Review of Economics of the Household, 17(2), 377–410. https://doi.org/10.1007/s11150-018-9429-x
   8. National Center for Children in Poverty. (n.d.). United States: Demographics of low-income children. http://www.nccp.org/profiles/US_profile_6.html
   9. Greenstein, R. (July 3, 2015). New research: EITC boosts employment and lifts many more out of poverty than previously thought. Center on Budget and Policy Priorities. https://www.cbpp.org/blog/new-research-eitc-boosts-employment-lifts-many-more-out-of-poverty-than-previously-thought
   10. Eissa, N. & Liebman, J. (1996). Labor supply response to the earned income tax credit. The Quarterly Journal of Economics, 111(2), 605–637. http://darp.lse.ac.uk/papersdb/Eissa-Liebman_(QJE96).pdf
   11. Adireksombat, K. (2010). The effects of the 1993 earned income tax credit expansion on the labor supply of unmarried women. Public Finance Review, 38(1), 11–40. https://journals.sagepub.com/doi/abs/10.1177/1091142109358626
   12. Hotz, V. J., Mullin, C., & Scholz, J. (2006). Examining the effect of the earned income tax credit on the labor market participation of families on welfare (No. w11968). National Bureau of Economic Research. https://www.nber.org/papers/w11968
   13. Miller, C., Katz, L., Azurdia, G., Isen, A., Schultz, C., & Aloisi, K. (2018). Final impact findings from the Paycheck Plus Demonstration in New York City. MDRC. https://www.mdrc.org/sites/default/files/PaycheckPlus_FinalReport_0.pdf
   14. Hoynes, H. & Patel, A. (2018). Effective policy for reducing poverty and inequality? The earned income tax credit and the distribution of income. Journal of Human Resources, 53(4), 859–890. https://muse.jhu.edu/article/706370
   15. Zippel, C. (2017). Policy brief: DC’s earned income tax credit. Fiscal Policy Institute. https://www.dcfpi.org/wp-content/uploads/2017/09/DC-EITC-Policy-Brief-2017.pdf
   16. New York State. (2019). Department of Taxation and Finance. Noncustodial parent earned income credit. https://www.tax.ny.gov/pit/credits/nceic.htm
   17. Tax Policy Center. Urban Institute & Brookings Institution. (2021). What is the earned income tax credit? https://www.taxpolicycenter.org/briefing-book/what-earned-income-tax-credit
   18. Montialoux, C. & Rothstein, J. (2015). The new California earned income tax credit. Institute for Research on Labor and Employment. https://irle.berkeley.edu/files/2016/IRLE-The-New-California-Earned-Income-Tax-Credit.pdf
   19. Hsin, A. & Felfe, C. (2014). When does time matter? Maternal employment, children’s time with parents, and child development. Demography, 51(5), 1867–1894. https://dx.doi.org/10.1007%2Fs13524-014-0334-5
   20. Donoghue, E. & Council on Early Childhood. (2017). Quality early education and child care from birth to Kindergarten. Pediatrics, 140(2), 1–6. https://doi.org/10.1542/peds.2017-1488
   21. Schwartz, M. & Wilson, E. (2008). Who can afford to live in a home? A look at data from the 2006 American Community Survey. United States Census Bureau. https://www.census.gov/housing/census/publications/who-can-afford.pdf
   22. Institute on Taxation and Economic Policy. (2019). When did your state enact its EITC? https://itep.org/when-did-your-state-enact-its-eitc/
   23. Waxman, S. (2020). States should follow California and Colorado, extend EITC to more immigrants. Center on Budget and Policy Priorities. https://www.cbpp.org/blog/states-should-follow-california-and-colorado-extend-eitc-to-more-immigrants
   24. Thomson, D., Gennetian, L., Chen, Y., Barnett, H., Carter, M., & Deambrosi, S. (2020). State policy and practice related to earned income tax credits may affect receipt among Hispanic families with children. Child Trends. https://www.childtrends.org/publications/state-policy-and-practice-related-to-earned-income-tax-credits-may-affect-receipt-among-hispanic-families-with-children
   25. Jay Inslee, Governor. Washington State. (Dec. 2014). Carbon Pollution Accountability Act of 2015. https://www.governor.wa.gov/sites/default/files/policy_briefs/pb_Carbon_market_policy.pdf
   26. Tax Credits for Workers and their Families. (2020). Washington State. http://www.taxcreditsforworkersandfamilies.org/state-tax-credits/washington/
   27. Goldin, J. & Liscow, Z. Tax benefit complexity and take-up: Lessons from the earned income tax credit. 72 Tax Law Review 59 (2018). https://law.stanford.edu/publications/tax-benefit-complexity-take-lessons-earned-income-tax-credit/
   28. Curran, M. (2021). The efficacy of cash supports for children by race and family size: Understanding disparities and opportunities for equity. Race and Social Problems, 13, 34-48. https://link.springer.com/article/10.1007/s12552-021-09315-6
   29. Maag, E. & Airi, N. (2021). Options to increase the EITC for workers without children at home. Tax Policy Center (Urban Institute & Brookings Institution). https://www.urban.org/sites/default/files/publication/103594/options-to-increase-the-eitc-for-workers-without-children-at-home.pdf
   30. National Conference of State Legislatures. (Feb. 16, 2021). Earned income tax credit overview. https://www.ncsl.org/research/labor-and-employment/earned-income-tax-credits-for-working-families.aspx
   31. Williams, E., Waxman, S., & Legendre, J. (Mar. 9, 2020). How much would a state earned income tax cost in fiscal year 2021? Center on Budget and Policy Priorities. https://www.cbpp.org/research/state-budget-and-tax/how-much-would-a-state-earned-income-tax-credit-cost-in-fiscal-year
   32. National Conference of State Legislatures. (Feb. 16, 2021). EITC enactments 2009-2021. https://www.ncsl.org/research/labor-and-employment/state-earned-income-tax-creadit-enactments.aspx
   33. H.R. 1319, 117th Congress (2021-2022). American Rescue Plan Act of 2021. https://www.congress.gov/117/bills/hr1319/BILLS-117hr1319enr.pdf
   34. Maag, E. Congdon, W., & Yau, E. (2021). The earned income tax credit: Program outcomes, payment timing and next steps for research. OPRE Report #2021-34. Washington, DC: Office of Planning, Research, and Evaluation, Administration for Children and Families, US Dept. of Health and Human Services. https://www.urban.org/research/publication/earned-income-tax-credit-program-outcomes-payment-timing-and-next-steps-research/view/full_report
   35. Williams, E., Waxman, S., & Legendre, J. (Mar. 9, 2020). States can adopt or expand earned income tax credits to build a stronger future economy. Center on Budget and Policy Priorities. https://www.cbpp.org/research/state-budget-and-tax/states-can-adopt-or-expand-earned-income-tax-credits-to-build-a
   36. Internal Revenue Service. (2021). Who qualifies for the earned income tax credit? https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/who-qualifies-for-the-earned-income-tax-credit-eitc#Valid%20Social%20Security%20Number
   37. Marr, C. & Huang, Y. (2019). Women of color especially benefit from working family tax credits. Center on Budget and Policy Priorities. https://www.cbpp.org/research/federal-tax/women-of-color-especially-benefit-from-working-family-tax-credits#:~:text=As%20Table%201%20shows%2C%20for,average%20EITC%20than%20white%20women.&text=Source%3A%20CBPP%20estimates%20based%20on%20March%202018%20Current%20Population%20Survey%20data
   38. Gagnon, D., Mattingly, M., & Shaefer, A. (2017). State EITC programs provide important relief to families in need. University of New Hampshire, Carsey School of Public Policy.  https://scholars.unh.edu/cgi/viewcontent.cgi?referer=&httpsredir=1&article=1295&context=carsey
   39. Tax Policy Center. (2020). The state of state (and local) tax policy. https://www.taxpolicycenter.org/sites/default/files/briefing-book/how_do_state_earned_income_tax_credits_work_1.pdf
   40. Congressional Research Service. (Jan. 12, 2021). The Earned Income Tax Credit (EITC): How it works and who receives it. https://fas.org/sgp/crs/misc/R43805.pdf
   41. H.B. 291, 55^th Leg., Reg. Sess., (N.M. 2021). https://www.nmlegis.gov/Sessions/21%20Regular/final/HB0291.pdf
   42. Thomas, D. & Fry, R. (Nov. 30, 2020). Prior to COVID-19, child poverty rates had reached record lows in U.S. Pew Research. https://www.pewresearch.org/fact-tank/2020/11/30/prior-to-covid-19-child-poverty-rates-had-reached-record-lows-in-u-s/
   43. Children’s Defense Fund (2015). Ending child poverty now. https://www.childrensdefense.org/wp-content/uploads/2018/06/Ending-Child-Poverty-Now.pdf
   44. Murphy, M. (May 18, 2021). Mass. urged to follow states on tax credit for immigrants. Metrowest Daily News. https://www.metrowestdailynews.com/story/news/2021/05/18/mass-pushed-give-tax-paying-immigrants-low-income-tax-credit/5142428001/
   45. Peter G. Peterson Foundation. (April 12, 2021). What is the earned income tax credit? https://www.pgpf.org/budget-basics/what-is-the-earned-income-tax-credit
   46. Urban Institute. (2021). State earned income tax credits: State and local finance initiative. https://www.urban.org/policy-centers/cross-center-initiatives/state-and-local-finance-initiative/state-and-local-backgrounders/state-earned-income-tax-credits
   47. Parolin, Z., Collyer, S., Curran, M., & Wimer, C. (Mar. 11, 2021). The potential poverty reduction effect of the American Rescue Plan. Center on Poverty and Social Policy at Columbia University. https://static1.squarespace.com/static/5743308460b5e922a25a6dc7/t/604aa2465cfc4a35b8a1c236/1615503943944/Poverty-Reduction-Analysis-American-Rescue-Plan-CPSP-2021.pdf
   48. The White House (2021). Child tax credit for non-filers. https://www.whitehouse.gov/child-tax-credit/sign-up/
   49. The Rockefeller Foundation. (May 4, 2021). Thirteen-year effort to implement a Working Families Tax Credit ends in success. https://www.rockefellerfoundation.org/case-study/thirteen-year-effort-to-implement-a-working-families-tax-credit-ends-in-success/
   50. Marr, C., Cox, K., Hingtgen, S., Windham, K., & Sherman, A. (Mar. 12, 2021). American Rescue Plan Act includes critical expansions of child tax credit and EITC. Center on Budget and Policy Priorities. https://www.cbpp.org/research/federal-tax/american-rescue-plan-act-includes-critical-expansions-of-child-tax-credit-and
   51. Zandi, M. (Feb. 7, 2012). Written testimony of Mark Zandi, Chief Economist and Co-Founder, Moody’s Analytics. https://www.economy.com/mark-zandi/documents/2012-02-07-JEC-Payroll-Tax.pdf
   52. L.D. 1651, 130th Leg., Spec. Sess., (Me. 2021). http://legislature.maine.gov/legis/bills/getPDF.asp?paper=SP0538&item=1&snum=130
   53. Institute on Taxation and Economic Policy. (June 28, 2021). State-level EITC victories in 2021. https://itep.org/state-level-eitc-victories-in-2021/
   54. As of October 1, 2021. State income tax statutes. For additional source and calculation information, please refer to Methods and Sources.

State Earned Income Tax Credit Evidence Review (PDF)

Recommended Citation
Prenatal-to-3 Policy Impact Center. (2021). Prenatal-to-3 policy clearinghouse evidence review: State earned income tax credit (ER 05B.0821). Child and Family Research Partnership. Lyndon B. Johnson School of Public Affairs, University of Texas at Austin. http://pn3policy.org/policy-clearinghouse/state-earned-income-tax-credit

Updated August 2021