Policy Statement––Center on Budget and Policy Priorities, February 1, 2013:
The Earned Income Tax Credit (EITC) is a federal tax credit for low- and moderate-income working people. It encourages and rewards work as well as offsetting federal payroll and income taxes. Twenty-five states, including the District of Columbia, have established their own EITCs to supplement the federal credit.
The EITC reduces poverty directly by supplementing the earnings of low-wage workers. There has been broad bipartisan agreement that a two-parent family with two children with a full-time, minimum-wage worker should not have to raise its children in poverty. At the federal minimum wage’s current level, such a family can move above the poverty line only if it receives the EITC as well as SNAP (food stamp) benefits.
During the 2010 tax year, the average EITC was $2,805 for a family with children and $262 for a family without children.
