The Earned Income Tax Credit (EITC): Percentage of Total Tax Returns and Credit Amount by State Page: 1 of 5
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Order Code RS22316
Updated November 21, 2006
CR8 Report for Congress
Received through the CRS Web
The Earned Income Tax Credit (EITC):
Percentage of Total Tax Returns and Credit
Amount by State
Christine Scott
Specialist in Tax Economics
Domestic Social Policy Division
Summary
The earned income tax credit (EITC), established in the tax code in 1975, provides
cash assistance to lower income working parents and individuals through the tax system.
In tax year 2004, total EITC (EITC applied against tax liability and refunded EITC) was
$40.7 billion, with 22.4 million tax returns claiming the EITC. Geographically, the four
largest states in terms of population - California, Texas, Florida, and New York -had
35.1% of all federal tax returns claiming an EITC and 35.8% of the total EITC amount.
States with a higher percentage of federal tax returns claiming the EITC were located
in the South, with Mississippi (32.1%) and Louisiana (28.9%) having the highest
percentage of federal tax returns claiming the EITC. This report will be updated when
new data become available.
The Earned Income Tax Credit (EITC)'
The earned income tax credit (EITC) is a refundable tax credit available to eligible
workers earning relatively low wages. Under current law, two categories of EITC
recipients exist: childless adults and families with children. Because the credit is
refundable, an EITC recipient need not owe taxes to receive the benefits. Eligibility for,
and the size of, the EITC is based on income, age (25 or older but less than 65 years of
age), residence (U.S. resident unless military stationed overseas), and the presence of
qualifying children.
The distribution of federal tax returns claiming the EITC by state can be shown in
two simple ways. First, the largest four states in terms of population - California, Texas,
Florida, and New York -had the largest number of federal tax returns claiming the EITC
and the largest share of the total EITC amount. These four states accounted for 35.1% ofCongressional Research Service + The Library of Congress
A more detailed description of EITC eligibility and the calculation of the credit are in CRS
Report RL31768, The Earned Income Tax Credit (EITC): An Overview, by Christine Scott.
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Scott, Christine. The Earned Income Tax Credit (EITC): Percentage of Total Tax Returns and Credit Amount by State, report, November 21, 2006; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metadc808753/m1/1/?q=RS22316: accessed May 30, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.