The Earned Income Tax Credit (EITC or EIC), is a fully refundable federal income tax credit for low- to moderate-income working individuals and families. This tax credit program was first authorized by Congress in 1975, and since then has become one of the most successful anti-poverty programs in the U.S. It has been legislatively expanded many times over the years, most notably through the Tax Reform Act of 1986 and most recently through the American Recovery and Reinvestment Act of 2009. Originally the program was conceived to "make work pay'" to offset the burden of social security taxes and provide an incentive for work.
The EITC equals a fixed percentage of earnings, up to a maximum amount; when the EITC exceeds the amount of taxes owed it results in a fully refundable tax credit. The maximum depends on income, marital status, and family size. For example, in tax year 2023:
- Single workers who were not raising children in their home with an income less than $17,640, or married workers with an income less than $24,210 could earn an EITC up to $600;
- Single workers who were raising one child in their home with an income of less than $46,560, or married workers with an income less than $53,120 could earn an EITC of up to $3,995
- Single workers who were raising two children in their home with an income less than $52,918, or married workers with an income less than $59,478 could earn an EITC of up to $6,604, and;
- Single workers who were raising three or more children in their home with an income less than $56,838, or married workers with an income less than $63,398 could get an EITC of up to $7,430 (Center on Budget and Policy Priorities).
As of December 2023, more than 23 million workers and families received about $57 billion in EITC. The average amount of EITC received nationwide in tax year 2022 was about $2,541 (Internal Revenue Service). Yet despite this success, millions of eligible workers do not claim the EITC. In response, advocacy groups have created and launched outreach campaigns to raise awareness about the EITC and increase the number of eligible participants who take advantage of the tax credit.
Due to the relative success of the EITC, other tax credit programs have also been authorized. These include tax credits specifically for families with children and other dependents, tax credits for higher education activities, and incentive programs for employers. The Child Tax Credit (CTC) and the Child and Dependent Care Tax Credit programs offset expenses related to caring for children and other dependents, while the American Opportunity Tax Credit can be claimed against tuition and other expenses related to higher education.
The EITC and CTC, along with other federal benefits and tax credit programs, can help domestic violence survivors regain financial footing and autonomy. Domestic violence survivors often experience under- or un-employment, economic instability, and poverty as a result of the economic abuse they experience. Abusers may prohibit survivors from accessing bank accounts, assets and opportunities for increasing skills and employment. As a lack of financial resources is very often the primary barrier for survivors wanting to leave the abusive relationship, helping survivors increase their economic stability and independence is not only a critical component of safety planning, but may also facilitate a successful escape from an abusive partner. The EITC, CTC, and other tax credit programs are effective anti-poverty strategies in the U.S., and ones that advocates can help domestic violence survivors to access.
This collection highlights key resources related to tax credit programs, including the EITC, CTC, Child and Dependent Care Tax Credit, Adoption Tax Credit, Higher Education Tax Credits, and Health Coverage Tax Credits. It includes general information and fact sheets; tax credits and public benefits eligibility; population-specific EITC considerations and programs, (including resources specific to domestic violence survivors and advocates working with survivors, such as tips for increasing survivors' access to the EITC, tax information provided by the IRS, and links for additional information); laws and public policy; reports and research; state-specific information; information on other tax credits for low-income individuals and families; and finally, information about free tax preparation services across the country.