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   he success of the federal earned
income tax credit (EITC) has been successfully brought to the state and local level. Currently,
19 states (including the District of Columbia)
across
the nation offer an earned income tax credit.
Fifteen of these states offer a refundable credit, whereby recipients can receive more in benefits than they pay in taxes.
Two localities—Denver, CO and Montgomery County, MD—offer refundable credits.
State EITCs are structured in such a way that they offer a percentage of the benefit a low-income family receives from the federal government. For example, low-income families in New York receive a credit equal to 30% of their federal credit. This means that low-income families with two children in New York qualify for up to $4,400 in federal benefits and $1,320 in state benefits—raising the effective wage of full-time employees by $2.86 The vast majority of states across the country have an income tax and therefore could implement a statewide EITC policy without significant bureaucratic difficulties. |
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