The Earned Income Tax Credit (EITC): How It
October 5, 2020
Works and Who Receives It
Margot L. Crandall-Hollick
The Earned Income Tax Credit (EITC) is a refundable tax credit available to eligible
Acting Section Research
workers earning relatively low wages. Because the credit is refundable, an EITC
Manager
recipient need not owe taxes to receive the benefit. Eligibility for and the amount of the

EITC are based on a variety of factors, including residence and taxpayer ID
Gene Falk
requirements, the presence of qualifying children, age requirements for those without
Specialist in Social Policy
qualifying children, and the recipient’s investment income and earned income.

Taxpayers with income above certain thresholds are ineligible for the credit. These
Conor F. Boyle
income thresholds vary based on marital status and number of qualifying children.
Analyst in Social Policy

The EITC depends on a recipient’s earned income. Specifical y, the EITC phases in as a
percentage of earned income (the “credit rate”) until the credit amount reaches its

maximum level. The EITC then remains at its maximum level over a subsequent range
of earned income, between the “earned income amount” and the “phaseout amount threshold.” Final y, the credit
gradual y decreases to zero at a fixed rate (the “phaseout rate”) for each additional dollar of adjusted gross income
(AGI) (or earned income, whichever is greater) above the phaseout amount threshold. The specific values of these
EITC parameters (e.g., credit rate, earned income amount) vary depending on several factors, including the
number of qualifying children a taxpayer has and the taxpayer’s marital status, as il ustrated in the figure and table
below. For 2020, the maximum EITC for a taxpayer without children is $538 per year. In contrast, the 2020
maximum EITC for a taxpayer with one child is $3,584 per year; for two children, $5,920 per year; and for three
or more children, $6,660 per year.
EITC Amount by Number of Qualifying Children, Marital Status, and Income, 2020

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EITC Parameters by Marital Status and Number of Qualifying Children, 2020
Number of Qualifying Children
0
1
2
3 or more
unmarried taxpayers (single and head of household filers)
credit rate
7.65%
34%
40%
45%
earned income amount
$7,030
$10,540
$14,800
$14,800
maximum credit amount
$538
$3,584
$5,920
$6,660
phaseout amount threshold
$8,790
$19,330
$19,330
$19,330
phaseout rate
7.65%
15.98%
21.06%
21.06%
income where credit = 0
$15,820
$41,756
$47,440
$50,954
married taxpayers (married filing jointly)
credit rate
7.65%
34%
40%
45%
earned income amount
$7,030
$10,540
$14,800
$14,800
maximum credit amount
$538
$3,584
$5,920
$6,660
phaseout amount threshold
$14,680
$25,220
$25,220
$25,220
phaseout rate
7.65%
15.98%
21.06%
21.06%
income where credit = 0
$21,710
$47,646
$53,330
$56,844
Source: IRS Revenue Procedure 2019-44 and Internal Revenue Code §32. For more information, see Table 1.
The EITC is provided to individuals and families once a year, in a lump-sum payment after individuals and
families file their federal income tax returns. Like al tax credits, the EITC can reduce income tax liability. And
because the EITC is a refundable tax credit, if a taxpayer’s EITC is greater than what they owe in income taxes,
they can receive the difference (the portion of the credit that remains after offset ing any income tax liability) as a
tax refund (or an increase in their tax refund, if they are already receiving a refund).
The amount of the credit a taxpayer receives is based on the prior year’s earned income and family composition.
In other words, the 2020 EITC—which is based on 2020 earned income (and other 2020 factors)—wil not be
paid until 2021.
The EITC cannot be counted as income in determining eligibility for or the amount of any federal y funded public
benefit program. An EITC refund that is saved by a taxpayer does not count against the resource limits of any
federal y funded public benefit program for 12 months after the refund is received.
For 2018 (i.e., 2018 tax returns filed in 2019), 26.5 mil ion taxpayers (17% of al taxpayers) received a total of
$64.9 bil ion from the EITC, making the credit the largest need-tested antipoverty program that provides cash
benefits. In that year, 97% of al EITC dollars were received by families with children. However, there was
considerable variation in EITC receipt by state, with a greater share filed in certain southern states compared to
other regions of the country.
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Introduction
The Earned Income Tax Credit (EITC) is a refundable tax credit available to eligible workers with
relatively low earnings. Because the credit is refundable, an EITC recipient need not ow e taxes to
receive the benefit. The credit is authorized by Section 32 of the Internal Revenue Code (IRC
§32) and administered as part of the federal income tax system. According to IRS data, 26.5
mil ion taxpayers received a total of $64.9 bil ion from the EITC for 2018, making the credit the
largest need-tested antipoverty program that provides cash benefits.
Under current law, the EITC is calculated based on a recipient’s earned income, using one of
eight different formulas, which vary depending on several factors, including the number of
qualifying children a taxpayer has (zero, one, two, or three or more) and their marital status
(unmarried or married). Al else being equal, the amount of the credit tends to increase with the
number of eligible children the EITC recipient has. Indeed, most of the EITC’s benefits—97% of
EITC dollars for 2018—went to families with children.
This report provides an overview of the EITC, first discussing eligibility requirements for the
credit, followed by how the credit is computed and paid. The report then provides data on the
growth of the EITC since it was first enacted in 1975. Final y, the report concludes with data on
the EITC from 2018 income tax returns, examining EITC receipt by number of qualifying
children, income level, tax filing status, and location of residence.
Did the “Tax Cuts and Jobs Act (TCJA)” modify the EITC?
At the end of 2017, President Trump signed into law P.L. 115-97, commonly referred to as the Tax Cuts and Jobs
Act or TCJA,1 which made numerous changes to the federal income tax for individuals and businesses.2 The final
law did not make any direct changes to the EITC.
The law did, however, indirectly affect the credit’s value in future years. Parameters of the EITC (see Table 1) are
indexed to inflation. Prior to P.L. 115-97, this measure of inflation was based on the consumer price index for
urban consumers (CPI-U). P.L. 115-97 changed this inflation measure to be permanently based on the chained CPI-
U (C-CPI-U).3 In comparison to CPI-U, chained CPI-U tends to grow more slowly. Hence, over time, the
monetary parameters of the EITC wil increase more slowly.
Eligibility for the EITC
A taxpayer must fulfil the following requirements to claim the EITC:
1. The taxpayer must file a federal income tax return.

1 T he original title of the law, the T ax Cuts and Jobs Act, was stricken before final passage because it violated what is
known as the Byrd rule, a procedural rule that can be raised in the Senate when bills, like the tax bill, are considered
under the process of reconciliation. T he actual title of the law is “T o provide for reconciliation pursuant to titles II and
V of the concurrent resolution on the budget for fiscal year 2018.” For more information on the Byrd rule, see CRS
Report RL30862, The Budget Reconciliation Process: The Senate’s “Byrd Rule”, by Bill Heniff Jr.
2 For more information on the changes made to the tax code by P.L. 115-97, see CRS Report R45092, The 2017 Tax
Revision (P.L. 115-97): Com parison to 2017 Tax Law, coordinated by Molly F. Sherlock and Donald J. Marples.
3 For more information, see Michael Ng and David Wessel, Up Front | The Hutchins Center Explains: The Chained
CPI, T he Brookings Institution, December 7, 2017, https://www.brookings.edu/blog/up-front/2017/12/07/the-hutchins-
center-explains-the-chained-cpi/.
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2. The taxpayer must have earned income.
3. The taxpayer must meet certain residency requirements.
4. The taxpayer’s children must meet relationship, residency, and age requirements
to be considered qualifying children for the credit.
5. Childless workers who claim the credit must be between ages 25 and 64.4 (This
age requirement does not apply to EITC claimants with qualifying children.)
6. The taxpayer’s investment income must be below a certain amount.
7. The taxpayer must not be disal owed the credit due to prior fraud or reckless
disregard of the rules when they previously claimed the EITC.
8. The taxpayer must provide the Social Security number (SSN) for themselves,
their spouse, if married, and any children for whom the credit is claimed.5
Additional y, a taxpayer with income above a certain dollar amount (labeled as “income where
credit = 0” in Table 1) wil be ineligible for the credit. Given that this income level is dependent
on the number of qualifying children and marital status of the taxpayer, this requirement is
discussed in greater detail in the section of the report entitled “Calculating the EITC.”
Requirements (1) through (8) are discussed in detail below.
Filing a Federal Income Tax Return
A person must file a federal income tax return to be eligible for the EITC. Those who do not file a
federal income tax return cannot receive the EITC.
The EITC can be claimed by taxpayers filing their tax return as married filing jointly, head of
household, or single.6 Taxpayers cannot claim the EITC if they use the filing status of married
filing separately. If the taxpayer has a qualifying child, the taxpayer must include the c hild’s
name and Social Security number on a separate schedule (Schedule EIC) filed with the federal tax
return.7
Earned Income
A taxpayer must have earned income to claim the EITC. Earned income for the EITC is defined
as wages, tips, and other compensation included in gross income. It also includes net self-

4 A taxpayer without qualifying children who can be claimed as a dependent on another person’s tax return is ineligible
for the EIT C. In addition, claimants without qualifying children must live in the United States for more tha n half the
year.
5 T he SSN must be issued to a citizen of the United States or pursuant to a provision of the Social Security Act relating
to the lawful admission for employment in the United States. See IRC §§32(m).
6 T here is an additional filing status that may claim the EIT C—“qualifying widow(er) with dependent child.”
Generally, taxpayers may file their tax return as married filing jointly in the year their spouse died. A taxpayer may be
eligible to use qualifying widow(er) with dependent child as his or her filing status for two years following the year his
or her spouse died. T his filing status entitles the taxpayer to use joint return tax rates and the highest standard deduction
amount (if he or she does not itemize deductions). It does not entitle t he taxpayer to file a joint return. T he taxpayer
calculates the EIT C using the formula for other unmarried tax filing statuses (head of household and single). T he
eligibility rules for this filing status can be found on page 10 of IRS Publication 501, available at http://www.irs.gov/
pub/irs-pdf/p501.pdf.
7 T he 2020 version of this form can be found at https://www.irs.gov/forms-pubs/about-schedule-eic-form-1040.
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employment income (self-employment income after deduction of one-half of Social Security
payroll taxes paid by a self-employed individual). In addition, according to the Internal Revenue
Service, those who provide care for disabled individuals and receive certain nontaxable payments
under a Medicaid waiver may treat those payments as earned income for the purposes of the
EITC.8
In addition, servicemembers may elect to include combat pay in their earned income when
calculating the EITC. Al income earned by a member of the Armed Forces while in a designated
combat zone is considered combat pay and is normal y not included in taxable income. However,
a taxpayer may elect to include combat pay as earned income for the purpose of calculating the
EITC.9 General y, servicemembers wil make this election if it results in a larger credit. (Using
combat pay to calculate the EITC does not make the combat pay taxable income.)
Certain forms of income are not considered earned income for the purpose of the EITC. These
include pension and annuity income, income of nonresident aliens not from a U.S. business,
income earned while incarcerated for work in a prison, and TANF benefits paid in exchange for
participation in work experience or community service activities.
Final y, taxpayers who claim the foreign earned income exclusion (i.e., they file Form 2555 or
Form 2555EZ with their federal income tax return) are ineligible to claim the EITC.10
Residency Requirements
Under current law, an EITC recipient must be a resident of the United States, unless the recipient
resides in another country because of U.S. military service.
Qualifying Children
An EITC recipient’s qualifying child must meet three requirements.11 First, the child must have a
specific relationship to the taxpayer (son, daughter, step child or foster child,12 brother, sister,
half-brother, half-sister, step brother, step sister, or descendent of such a relative). Second, the
child must share a residence with the taxpayer for more than half the year in the United States.13

8 T hese payments are provided to individual care providers for the care of eligible individuals under a state Medicaid
Home and Community-Based Services waiver program described in §1915(c) of the Social Security Act and are not
subject to federal taxation. See IRS Notice 2014 -7; IRS, Certain Medicaid Waiver Paym ents May Be Excludable From
Incom e, February 23, 2015, https://www.irs.gov/individuals/certain-medicaid-waiver-payments-may-be-excludable-
from-income; and Feigh v. Com m issioner, No. 20163-17, 152 T .C. 267, May 15, 2019.
9 For more information, see https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/special-eitc-
rules.
10 See Internal Revenue Code (IRC) §32(c)(1)(C) and http://www.irs.gov/Individuals/EIT C,-Earned-Income-T ax-
Credit,-Questions-and-Answers.
11 If an individual is the qualifying child for the purposes of the EIT C of another person, that individual cannot
themselves claim the EIT C. For more information, see http://www.irs.gov/Individuals/EIT C,-Earned-Income-T ax-
Credit,-Questions-and-Answers.
12 If placed by an authorized agency or court order.
13 Qualifying children who reside with a servicemember who is stationed outside the United States while serving on
extended active duty with the U.S. Armed Forces are considered to reside in the United States for the purposes of the
EIT C.
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Third, the child must meet certain age requirements; namely, the child must be under the age of
19 (or age 24, if a full-time student) or be permanently and total y disabled.
As a result of these three requirements, a child may be the qualifying child of more than one
taxpayer in the same household. For example, a child who lives with a single parent, grandparent,
and aunt in the same home could be a qualifying child of al three of these individuals. But only
one of these individuals can claim the qualifying child for the EITC, and the others cannot. In
these cases, “tiebreaker” rules for who can claim the child for the EITC apply.14 If, as a result of
these rules, a taxpayer cannot claim any qualifying children for the EITC, the taxpayer may be
able to claim the credit for those with no qualifying children.15
Age Requirements for EITC Recipients with No Qualifying
Children
If a taxpayer has no qualifying children, he or she must be between 25 and 64 years of age to be
eligible for the EITC. There is no age requirement for taxpayers with qualifying children.
Investment Income
A taxpayer with investment income over a certain dollar amount is ineligible for the EITC. For
2020, the limit on investment income is $3,650. Investment income is defined as interest income
(including tax-exempt interest), dividends, net rent, net capital gains, and net passive income. It
also includes royalties that are from sources other than the filer’s ordinary business activities.
Disallowance of the EITC Due to Fraud or Reckless Disregard
of Rules
A taxpayer is barred from claiming the EITC for a period of 10 years after the IRS makes a final
determination to reduce or disal ow a taxpayer’s EITC because that individual made a fraudulent

14 Under tiebreaker rules, a child who can be claimed as an EIT C qualifying child of more than one taxpayer is
generally treated as the EIT C qualifying child of (by order of application): (1) the parents, if they file a joint return and
claim the child as a qualifying child; (2) the parent if only one of the persons is the child’s parent and the parent claims
the child as a qualifying child; (3) the parent with whom the child lived for the longer period of time dur ing the tax year
if two of the persons are the child’s parent, they do not file a joint return together, and both parents claim the child; (4)
the parent with the highest AGI if the child lived with each parent for the same amount of time during the tax ye ar, they
do not file a joint return together, and both parents claim the child; (5) the person with the highest AGI if no parent can
claim the child as a qualifying child; or (6) the person with the highest AGI if a parent may claim the child as a
qualifying child but no parent claims the child as a qualifying child, but only if that person has an AGI higher than any
parent who may claim the child as a qualifying child. For examples of application of the tiebreaker rules and answers to
common questions, see Internal Revenue Service, Qualifying Child of More Than One Person, AGI and Tiebreaker
Rules, June 23, 2017, https://www.eitc.irs.gov/tax-preparer-toolkit/frequently-asked-questions/qualifying-child-of-
more-than-one-person-agi-and.
15 Currently, there is no federal regulation which states that taxpayers with a qualifying child who do not claim that
qualifying child for the EIT C are ineligible for the credit. In the past, information provided on the IRS website stated
that such individuals were ineligible for the childless EIT C. However, “the IRS has changed its position in proposed
regulations.” For more information, see Joint Committee on Taxation, Present Law and Background of Individual
Refundable Incom e Tax Credits and a Description of Modifications to Refundable Credits Included in H.R. 6800, as
Passed by the House of Representatives, June 16, 2020, JCX-17-20, pp. 9-10.
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EITC claim. A taxpayer is barred from claiming the EITC for a period of two years after the IRS
determines that the individual made an EITC claim “due to reckless and intentional disregard of
the rules” of the EITC, but that disregard was not found to be fraud.16
Identification Requirements
To be eligible for the credit, the taxpayer must provide valid Social Security numbers (SSNs) for
work purposes for themselves, spouses if married filing jointly, and any qualifying children.17 The
SSNs must be issued before the due date of the income tax return.18 (U.S. citizenship is not
required to be eligible for the credit. SSNs do not indicate U.S. citizenship.) Nonresident aliens —
those who do not have green cards or do not spend sufficient time in the United States—are
general y ineligible for the EITC.19
Calculating the EITC
The EITC amount is based on formulas that consider earned income, number of qualifying
children, marital status, and adjusted gross income (AGI). In general, the EITC equals a fixed
percentage (the “credit rate”) of earned income until the credit reaches its maximum amount. The
EITC then remains at its maximum level over a subsequent range of earned income, between the
“earned income amount” and the “phaseout amount threshold.” Final y, the credit gradual y
decreases in value to zero at a fixed rate (the “phaseout rate”) for each additional dollar of earned
income or AGI (whichever is greater) above the phaseout amount threshold. The specific values
of these EITC parameters (e.g., credit rate, earned income amount, etc.) vary depending on
several factors, including the number of qualifying children a taxpayer has and his or her marital
status, as il ustrated in Table 1.
Table 1. EITC Parameters by Marital Status
and Number of Qualifying Children, 2020
Number of Qualifying Children
0
1
2
3 or more
unmarried taxpayers (single and head of household filers)
credit rate
7.65%
34%
40%
45%
earned income amount
$7,030
$10,540
$14,800
$14,800
maximum credit amount
$538
$3,584
$5,920
$6,660
phaseout amount threshold
$8,790
$19,330
$19,330
$19,330
phaseout rate
7.65%
15.98%
21.06%
21.06%

16 See IRC §32(k).
17 For more information on Social Security numbers valid for work purposes, see SSA, Social Security Number for
Noncitizens, at https://www.socialsecurity.gov/pubs/EN-05-10096.pdf; CRS Report R43840, Federal Incom e Taxes
and Noncitizens: Frequently Asked Questions, by Erika K. Lunder and Margot L. Crandall-Hollick; archived CRS
Report R44290, Legal Authority for Aliens to Claim Refundable Tax Credits: In Brief, by Erika K. Lunder.
18 See IRC §32(m).
19 Nonresident aliens may be eligible to claim the credit if they are married to a U.S. citizen or resident alien, make the
election to be treated as a resident alien, and file a joint return. For more information on the tax treatment of
nonresident aliens, see CRS Report RS21732, Federal Taxation of Aliens Working in the United States, by Erika K.
Lunder (available to congressional clients upon request); CRS Report R43840, Federal Incom e Taxes and Noncitizens:
Frequently Asked Questions, by Erika K. Lunder and Margot L. Crandall-Hollick.
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Number of Qualifying Children
0
1
2
3 or more
income where credit = 0
$15,820
$41,756
$47,440
$50,954
married taxpayers (married filing jointly)
credit rate
7.65%
34%
40%
45%
earned income amount
$7,030
$10,540
$14,800
$14,800
maximum credit amount
$538
$3,584
$5,920
$6,660
phaseout amount threshold
$14,680
$25,220
$25,220
$25,220
phaseout rate
7.65%
15.98%
21.06%
21.06%
income where credit = 0
$21,710
$47,646
$53,330
$56,844
Source: IRS Revenue Procedure 2019-44 and Internal Revenue Code (IRC) §32.
The EITC ranges from a maximum credit of $538 for a taxpayer without a child to $6,660 for a
taxpayer with three or more qualifying children, as il ustrated in Figure 1.
Figure 1. Maximum EITC by Number of Qualifying Children, 2020

Source: Congressional Research Service, based on IRS Revenue Procedure 2019-44 and Internal Revenue Code
(IRC) §32.
The phaseout amount threshold varies by both the number of qualifying children a taxpayer has
and his or her marital status. The phaseout amount threshold for those who are married filing joint
returns is $5,890 greater than for unmarried filing statuses w ith the same number of children.
(Taxpayers who file as married filing separately are ineligible for the EITC.) This higher phaseout
amount threshold for married taxpayers reduces (but general y does not eliminate) potential
“marriage penalties” in the EITC whereby the credit for a married couple is less than the
combined credit of two unmarried recipients.
Figure 2 il ustrates the EITC amount by earned income level for an unmarried taxpayer with one
child for 2020. It shows the three distinct ranges of EITC for this family:
 Phase-in Range: The EITC increases with earned income from the first dollar of
earned income up to earned income of $10,540. Over this earned income range,
the credit equals the credit rate (34% for a taxpayer with one child) times the
amount of annual earned income. The $10,540 threshold is cal ed the earned
income amount and is the level at which the EITC ceases to increase with earned
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income. The income interval up to the earned income amount, where the EITC
increases with earned income, is known as the phase-in range.
 Plateau: The EITC remains at its maximum level of $3,584 from the earned
income amount ($10,540) until $19,330. The $3,584 credit represents the
maximum credit for a taxpayer with one child in 2020. The income interval with
the EITC fixed at its maximum value represents the plateau on Figure 2.
 Phaseout Range: Once adjusted gross income (or if greater, earned income)
exceeds $19,330, the EITC is reduced for every additional dollar over that
amount. The $19,330 threshold is known as the phaseout amount threshold for a
single taxpayer with one child in 2020. For each dollar over the phaseout amount
threshold, the EITC is reduced by 15.98%. The 15.98% rate is known as the
phaseout rate. The income interval from the phaseout income level until the
EITC is completely phased out is known as the phaseout range.
The EITC is completely phased out (EITC = $0) once the taxpayer’s AGI (or earned income,
whichever is greater) reaches $41,756. The earned income amounts and the phaseout amount
thresholds are adjusted each year for inflation.
Figure 2. EITC for an Unmarried Taxpayer with One Child by Income, 2020

Source: Congressional Research Service, based on information in IRS Revenue Procedure 2019-44 and Internal
Revenue Code §32.
Notes: In this simplified example, adjusted gross income (AGI) is assumed to equal earned income.
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EITC claimants use tables published by the IRS to calculate their credit amount based on their
income, marital status, and number of qualifying children. The instructions for the federal income
tax form show the EITC amounts in tables by income brackets (in $50 increments).20
Income Limits for the EITC
As previously discussed, the amount of the EITC is reduced for each dollar of AGI (or earned
income, if greater) above a certain dollar threshold, referred to as the phaseout amount threshold.
That threshold, combined with the phaseout rate, results in a specific income level (referred to as
“income where credit = 0” in Table 1) above which a taxpayer is ineligible for the credit. This
income level, where the credit reaches zero, is sometimes referred to as the eligibility threshold.
As il ustrated in Table 1, there are eight eligibility thresholds for the EITC depending on the
number of qualifying children a taxpayer has and his or her marital status. The eligibility
thresholds vary every year given that they are based in part on a parameter of the credit—the
phaseout amount threshold—that is adjusted for inflation. Table 2 shows the EITC eligibility
thresholds for 2020. An EITC claimant’s AGI (or earned income, if higher) must be below these
thresholds for the claimant to qualify for the EITC. In 2020, these thresholds range from $15,820
for an unmarried taxpayer with no qualifying children to $56,844 for a married taxpayer filing
jointly with three or more qualified children.
Table 2 expresses these eligibility thresholds as a percentage of the 2020 poverty guidelines. For
example, the poverty guideline for a family of three in 2020 was $21,720. Families of three with
income at or below this amount are considered poor. The EITC eligibility threshold of $47,440
for an unmarried person filing jointly with two qualifying children was more than twice (218%)
the poverty guideline for a family of that type.
Table 2 also expresses these eligibility thresholds as a percentage of the earned income of one
worker who works at the federal minimum wage ($7.25 per hour), 40 hours per week, 52 weeks a
year ($15,080 annual y). For the purposes of the calculations in Table 2, married EITC recipients
are assumed to have the same aggregate annual earned income as unmarried recipients—$15,080.
The EITC is available in 2020 to families with children who have earned income between 2.8 to
3.8 times the annual earnings from a minimum wage job (277% to 377% of $15,080).
Table 2. Maximum AGI to Qualify for the EITC, by Number of Qualifying Children
and Filing Status, 2020
Three or
One
Two
More
No Qualifying
Qualifying
Qualifying
Qualifying
Children
Child
Children
Children

Unmarried
$15,820
$41,756
$47,440
$50,594
Married Filing Jointly
$21,710
$47,646
$53,330
$56,844

As a percentage of the poverty threshold
Unmarried
124%
242%
218%
193%a
Married Filing Jointly
126%
219%
204%
185%b

20 T he tables can be found, for 2019 returns, beginning on page 46 of the Form 1040 general instructions, at
https://www.irs.gov/pub/irs-pdf/i1040gi.pdf.
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Three or
One
Two
More
No Qualifying
Qualifying
Qualifying
Qualifying
Children
Child
Children
Children

As a percentage of earned income at the federal minimum wage
40 hours per week, 52 weeks per year
Unmarried
105%
277%
315%
336%
Married Filing Jointly
144%
316%
354%
377%
Source: Congressional Research Service, based on IRS Revenue Procedure 2019-44, Internal Revenue Code
(IRC) §32 and the 2020 Poverty Guidelines available at https://aspe.hhs.gov/poverty-guidelines.
a. Represents the EITC AGI threshold divided by the poverty guidelines for a family of 4
b. Represents the EITC AGI threshold divided by the poverty guidelines for a family of 5.
Payment of the EITC
The EITC is provided to individuals and families annual y in a lump-sum payment after a
taxpayer files a federal income tax return.21 Like al tax credits, the EITC can reduce income tax
liability. And because the EITC is a refundable tax credit, if a taxpayer’s EITC is greater than
what they owe in income taxes, they can receive the difference (the portion of the credit that
remains after offsetting any income tax liability) as a tax refund (or an increase in their tax
refund, if they are already receiving a refund).
The amount of the credit that remains after offsetting any income tax liability is often referred to
as the refundable portion of the EITC, whereas the amount that reduces income tax liability is
referred to as the nonrefundable portion of the credit. The refundable portion of the credit can
also offset other tax liabilities collected on the federal income tax return. These other taxes
include self-employment taxes and uncollected Social Security and Medicare taxes (e.g., Social
Security and Medicare taxes on unreported tip income).22 General y, only refundable credits, like
the EITC, can offset other non-income tax liabilities. The amount of the refundable portion that
remains after offsetting other tax liabilities is sometimes referred to as the “refunded” amount. A
taxpayer who has no income tax liability wil receive al of the EITC as the refundable portion of
the credit.
Of the total aggregate amount of the EITC received in 2018—$64.9 bil ion—$0.6 bil ion offset
income tax liability remaining after nonrefundable credits, $8.1 bil ion offset other taxes collected
on the income tax return, and $56.2 bil ion was refunded. In other words, for 2018, $64.3 bil ion

21 Before 2011, any persons with a qualified child eligible for the EIT C could elect to receive advance payment of the
credit through the employer’s payroll withholding system by filing an eligibility certificate (Form W -5) with his or her
employer. T he option was little used and eliminated by P.L. 111-226.
22 Other taxes also includes uncollected Social Security and Medicare taxes due on compensation of an employee that
was treated as an independent contractor by an employer. T here are a variety of other taxes collected on the federal
income tax return. Generally, these taxes are more likely to be paid by higher -income taxpayers who would not receive
the EIT C. T hey include additional penalty taxes on individual retirement accounts (IRAs) and other qualified
retirement accounts or other tax-favored accounts, household employment taxes, repayment of the first -time
homebuyer credit, and the 0.9% additional Medicare tax on higher -income taxpayers. Of note, the net invest ment
income tax (NIIT ) is considered an income tax.
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of the EITC was received as the refundable portion of the credit (and hence exceeded income
taxes owed after reducing income tax liability by any nonrefundable tax credits).23
The EITC benefits families when they file their income taxes. Thus, payments are general y based
on the prior year’s income, earned income, and family composition.24 That is, the 2020 EITC,
based on a taxpayer’s earned income and family composition in 2020, wil be paid in 2021.25 If
the taxpayer is owed a refund, and that filer’s return includes an EITC, that refund wil be made
on or after February 15.26
Interaction with Other Tax Provisions
On the tax form, the EITC can be found in the payments section after the lines for (1) income tax
liability net of any nonrefundable credits, (2) other non-income tax payments and (3) the lines for
withholding and estimated tax payments. Nonrefundable tax credits, which are taken against
(reduce) income tax liability, include the Lifetime Learning credit,27 the child and dependent care
credit,28 a savings credit,29 and the nonrefundable portions of both the child credit30 and the
American Opportunity tax credit (AOTC).31 If an EITC-eligible family has any income tax
liability and receives one or more of these credits, the total amount of their EITC wil remain
unchanged, but the amount they receive as the refundable portion of the credit (i.e., the amount
which exceeds income tax liability) wil change. Specifical y, if nonrefundable tax credits can
reduce a family’s tax liability, a greater amount of their EITC wil be received as the refundable
portion, and less wil offset their income tax liability.

23 T his total included $8.1 billion that offset other taxes plus $56.2 billion that was refunded.
24 Congress has allowed taxpayers to elect to use older income in computing their EIT C (and the refundable portion of
the child tax credit, known as the additional child tax credit or ACT C). For a discussion, see “EIT C/CT C Credit
Computation Look-Back” in CRS Report R45864, Tax Policy and Disaster Recovery, by Molly F. Sherlock and
Jennifer T eefy.
25 T he Protecting Americans from T ax Hikes (PAT H) Act (Division Q of P.L. 114-113) prevents a taxpayer from
claiming the EIT C for any year in which the filer did not have a Social Security number (SSN) on or before the due
date of the tax return for that year. T his provision prevents a filer who obtains an SSN from retroactively claiming the
EIT C for any prior open tax years (generally three years) when the filer did not have an SSN at the time those years’
returns were due.
26 T his was effective beginning with returns filed in 2017 (i.e., 2016 income tax returns). §201 of the Protecting
Americans from T ax Hikes (PAT H) Act (Division Q of P.L. 114-113).
27 CRS Report R41967, Higher Education Tax Benefits: Brief Overview and Budgetary Effects, by Margot L. Crandall-
Hollick.
28 See CRS Report R44993, Child and Dependent Care Tax Benefits: How They Work and Who Receives Them , by
Margot L. Crandall-Hollick.
29 See CRS In Focus IF11159, The Retirement Savings Contribution Credit, by Molly F. Sherlock.
30 For more information on the nonrefundable (and refundable) portion of the child tax credit, see CRS Report R41873,
The Child Tax Credit: Current Law, by Margot L. Crandall-Hollick.
31 See CRS Report R42561, The American Opportunity Tax Credit: Overview, Analysis, and Policy Options, by Margot
L. Crandall-Hollick.
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EITC Participation Rates
According to the IRS, 78% of eligible EITC recipients received the credit for 2016 (i.e., on their 2016 income tax
return), with substantial variation by number of qualifying children.32 According to data from the IRS Taxpayer
Advocate, for 2016 an estimated 65% of eligible EITC recipients with no qualifying children claimed the EITC,
compared to an estimated 86% participation for those with one child, 85% participation for those with t wo
children, and 82% participation for those with three children.33 Estimates by state can be found in Table A-4.
Eligible individuals may not claim the EITC for a variety of reasons. The IRS notes that nonparticipants are more
likely to be workers who are “living in rural areas, self-employed, receiving certain disability pensions or have
children with disabilities, without a qualifying child, not proficient in English, grandparents raising their
grandchildren, or recently divorced, unemployed, or experienced other changes to their marital, financial or
parental status.”34 In addition, eligible workers who do not (and are not required to) file a federal income tax
return due to their low incomes, wil not receive the credit.
Note that data on EITC receipt summarized in this report are from the IRS Statistics of Income (SOI), which
general y provides information on credit receipt (after compliance measures like audits in a given year). Hence,
EITC receipt data include eligible and ineligible recipients. For more information, see CRS Report R43873, The
Earned Income Tax Credit (EITC): Administrative and Compliance Chal enges, by Margot L. Crandal -Hol ick.
For taxpayers whose income places them in the “phaseout range” of the credit, reducing their
income (al else being unchanged) wil result in a larger EITC. (As il ustrated in Figure 2,
reducing income when a taxpayer is in the phaseout range results in the taxpayer increasing the
amount of the credit they receive.) A variety of forms of income can be excluded from both AGI
and earned income, reducing a taxpayer’s AGI or earned income for purposes of calculating the
credit. For example, pretax contributions to savings accounts for retirement or medical expenses
are not included in either AGI or earned income. Hence, by making these contributions, EITC
claimants whose precontribution income places them in the credit’s phaseout range wil reduce
their AGI or earned income for purposes of calculating the EITC and thus receive a
larger credit.35
In contrast, for taxpayers whose earned income places them in the credit’s “phase-in range”,
reducing their earned income (al else unchanged) wil result in a smal er EITC. (As previously
noted, the credit phases in over a range of earned income, whereas it phases out based on adjusted
gross income or earned income, whichever is greater.) As il ustrated in Figure 2, reducing income
when a taxpayer is in the phase-in range results in the taxpayer reducing the amount of the credit
they receive. Generally, nontaxable income cannot be included in earned income for purposes of
calculating the EITC. However, as previously discussed, servicemembers may elect to include
their nontaxable combat pay as earned income, for purposes of calculating the EITC. General y,
servicemembers whose income (excluding their combat pay) places them in the phase-in range
wil elect to include their combat pay in earned income for purposes of calculating the EITC in
order to receive a larger credit.

32 Center for Administrative Records Research and Applications, U.S. Census Bureau in collaboration with IRS. Data
can be found at https://www.eitc.irs.gov/eitc-central/participation-rate/eitc-participation-rate-by-states.
33 National T axpayer Advocate, Earned Income Tax Credit, Special Report to Congress, Volume 3. Figure A.7.
34 Internal Revenue Service, “About EIT C: Who are we missing?” June 29, 2020, https://www.eitc.irs.gov/eitc-central/
about-eitc/about -eitc.
35 In contrast, if the precontribution income places them in the plateau or the phase-in range, decreasing their earned
income by making certain pretax savings contributions may either have no impact or result in a smaller credit.
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Treatment of the EITC for Need-Tested Benefit Programs
By law, the EITC cannot be counted as income in determining eligibility for, or the amount of,
any federal y funded public benefit program, including Supplemental Nutrition Assistance
Program (SNAP) food assistance, low-income housing, Medicaid, Supplemental Security Income
(SSI), and Temporary Assistance for Needy Families (TANF).36 An EITC that is saved by the filer
does not count against the resource limits of any federal y funded public benefit program for 12
months after the refund is received.
Data on EITC Receipt
The EITC was first enacted in 1975 as a temporary measure meant to encourage economic
growth in the face of the 1974 recession and rising food and energy prices. It was also original y
intended to “assist in encouraging people to obtain employment, reducing the unemployment rate,
and reducing the welfare rolls.”37 Over time the list of EITC objectives has grown to include
poverty reduction. Today the EITC is the largest need-tested, antipoverty program that provides
cash benefits. This section first provides a historical overview of the growth of the EITC from
1975 to 2018; it then examines information on EITC receipt for 2018.
Trends in EITC Receipt from 1975 to 2018
When original y enacted by the Tax Reduction Act of 1975 (P.L. 94-12), the EITC was a
temporary refundable tax credit in effect for 1975. For that year, 6.2 mil ion taxpayers received
$1.25 bil ion from the EITC (in constant 2018 dollars, this equals $5.8 bil ion). The credit was
extended several more times on a temporary basis and made permanent by the Revenue Act of
1978 (P.L. 95-600). Legislation enacted in 1986 (P.L. 99-514), 1990 (P.L. 101-508), 1993 (P.L.
103-66), 2001 (P.L. 107-16), and 2009 (P.L. 111-5) increased the amount of the credit by
changing the credit formula. For more information on the legislative history of the EITC, see
CRS Report R44825, The Earned Income Tax Credit (EITC): A Brief Legislative History, by
Margot L. Crandal -Hollick.
Before 1990, the credit amount was calculated as a percentage of earned income (“the credit
rate”) up until the earned income amount. The credit then remained at its maximum level before
gradual y decreasing in value as earned income increased. Legislative changes to the credit made
during this time general y increased the amount of the credit in a variety of ways, including
increasing the credit rate, increasing the earned income amount, increasing the phaseout amount
threshold, and decreasing the phaseout rate.
Beginning in 1990 and more substantial y in 1993, the credit formula was revised such that the
credit amount varied based on earned income and, to a certain extent, the number of qualifying
children. This revision essential y increased the credit by family size. In addition, in 1993,
Congress made workers without qualifying children eligible for the EITC for the first time,
although the credit was smal er than the credit for claimants with qualifying children.

36 T he T ax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (P.L. 111-312) included a
provision which made tax refunds, including those resulting from the EIT C, disregarded in the administration of federal
programs and federally assisted programs. At the end of 2012, this provision was made permanent by the American
T axpayer Relief Act of 2012 (P.L. 112-240). See IRC §6409.
37 U.S. Congress, Senate Committee on Finance, Tax Reduction Act of 1975, Report to Accompany H.R. 2166, 94th
Cong., 1st sess., March 17, 1975, S.Rept. 94-36, p. 33.
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In 2001, the credit formula was revised again so that it also varied based in part on marital status.
As a result of this change, often referred to as “marriage penalty relief,” certain married taxpayers
would receive a larger credit than unmarried taxpayers with the same number of children. In
2009, the marriage penalty relief was expanded further and a larger credit was created for families
with three or more children. These 2009 changes were extended several times and made
permanent by P.L. 114-113.
Figure 3 shows the number of taxpayers receiving the EITC for 1975 to 2018. Figure 4 shows
the amount of the EITC received, with dollar amounts adjusted for inflation to represent 2018
dollars. The figures show the effects of the legislative expansions of the EITC, with the credit
experiencing growth in the late 1980s through the mid-1990s and then again in the 2000s.
Beginning in 2014, the total credit dollars claimed in real terms started to decline. It is unclear
what is causing the decline. One possible explanation is that income growth among low-wage
workers over this time period has reduced the number of people qualifying for the EITC.38
Another possible explanation may be that eligible poor taxpayers, concerned that they may be
audited, are not claiming the credit.39
Figure 3. Number of Tax Returns with the EITC, 1975-2018

Source: Congressional Research Service. For pre-1996 data, U.S. Congress, House Committee on Ways and
Means, 2004 Green Book, Background Material and Data on Programs Within the Jurisdiction of the Committee on
Ways and Means, 108th Congress, 2nd session, WMCP 108-6, March 2004, pp. 13-41. For 1996 and later data,
Internal Revenue Service, Statistics of Income, SOI Tax Stats-Individual Statistical Tables by Size of Adjusted Gross
Income, Table 2.5.
Note: For a tabular display of this information, see Table A-1.
As shown in Figure 4, throughout the EITC’s history, a relatively smal share of the credit has
reduced regular federal income tax liability. In other words, the majority of credit dollars exceed
income taxes owed after nonrefundable credits have been applied. And over time, the share of the
credit that offsets income tax liability (after nonrefundable credits) has fluctuated, but general y

38 CRS Report R45090, Real Wage Trends, 1979 to 2018, by Sarah A. Donovan and David H. Bradley.
39 Jason DeBacker, Bradley T . Heim, and Anh T ran, et al., “T he Effects of IRS Audits on EIT C Claimants,” National
Tax Journal, vol. 71, no. 3 (September), pp. 451-484.
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fal en. This is likely due in part to the enactment and expansion of the child credit, which reduced
many EITC recipients’ income tax liabilities. As income tax liabilities net of nonrefundable
credits have fal en, other tax liabilities offset by the refundable portion of the EITC have
increased. (Only refundable credits can offset other tax liabilities, and hence these amounts are
often considered part of the refundable portion of the EITC, although they are displayed
separately in Figure 4.)
Figure 4. Total EITC Dollars, 1975-2018

Source: Congressional Research Service. For pre-1996 data, Individual Income Tax Return Reports are available
in the IRS SOI Tax Stats Archive-1954 to 1999 Individual Income Tax Return Reports. For 1996 and later data,
see Internal Revenue Service, Statistics of Income, SOI Tax Stats-Individual Statistical Tables by Size of Adjusted Gross
Income, Table 2.5.
Notes: Constant 2018 dol ars were computed using the Consumer Price Index for al Urban Consumers
(CPI-U). For a tabular display of this information, see Table A-1.
a. The nonrefundable portion of the EITC is the amount of the credit that reduces income tax liability that
remains after applying nonrefundable credits (e.g., the child and dependent credit and the nonrefundable portion
of the child tax credit).
b. The refundable portion of the EITC can offset other tax liabilities that are included on an income tax return,
including self-employment taxes and unpaid Social Security and Medicare payrol taxes. Because nonrefundable
credits cannot offset these taxes, these amounts are often considered part of the refundable portion of the
credit.
c. The refunded amount is the amount of the credit that remains after (a) and (b) described above.
The growth in the total amount of EITC dollars in the late 1980s to the mid-1990s was due to
increases not only in the number of taxpayers eligible for the credit, but also in the average credit
amount. Figure 5 shows the average EITC for 1975 to 2018, in inflation-adjusted (2018) dollars.
Before the 1986 Tax Reform Act (P.L. 99-514), EITC thresholds were not indexed for inflation,
and the average credit lost value each year. However, the 1986 act increased the credit’s monetary
parameters for prior inflation and adjusted the threshold amounts and maximum credits annual y
for inflation in future years. The credit formula was also revised in 1990 and then again in 1993
such that the amount of the credit depended to a certain extent on family size. These changes
resulted in an increasing average credit between the late 1980s and late 1990s. Since then, the
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average credit has largely maintained its real value. However, increases in the average credit
amount in 2001 and 2009 were likely due to legislative changes that included larger credits for
some married claimants and for families with three or more children.40 The average EITC for
2018 was $2,451.
Figure 5. Average EITC, 1975-2018

Source: Congressional Research Service. For pre-1996 data, U.S. Congress, House Committee on Ways and
Means, 2004 Green Book, Background Material and Data on Programs Within the Jurisdiction of the Committee on
Ways and Means, 108th Congress, 2nd session, WMCP 108-6, March 2004, pp. 41 and Individual Income Tax
Return Reports available at the IRS SOI Tax Stats Archive-1954 to 1999 Individual Income Tax Return Reports.
For 1996 and later data, Internal Revenue Service, Statistics of Income, SOI Tax Stats-Individual Statistical Tables by
Size of Adjusted Gross Income, Table 2.5.
Notes: Constant 2018 dol ars were computed using the Consumer Price Index for al Urban Consumers
(CPI-U). For a tabular display of this information, see Table A-1.
EITC Receipt for 2018
For 2018, 26.5 mil ion taxpayers received $64.9 bil ion from the EITC.
By Number of Qualifying Children
Most EITC recipients, and those who received the most EITC dollars, were families with
children. Figure 6 shows total EITC dollars for 2018 by number of qualifying children. For 2018,
3% of al EITC dollars were received by taxpayers with no qualifying children and 97% were
received by taxpayers with qualifying children.

40 T he increase in the value of the credit in 2009 is likely due to the changes made by the American Recovery and
Reinvestment Act of 2009 (ARRA, P.L. 111-5) which expanded the credit for families with three or m ore children and
increased marriage penalty relief.
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Figure 6. Distribution of Total EITC Dollars by Number of Qualifying Children, 2018

Source: Congressional Research Service, based on data from the Internal Revenue Service, Statistics of Income,
SOI Tax Stats-Individual Statistical Tables by Size of Adjusted Gross Income, Table 2.5.
Notes: Percentages may not sum to 100% due to rounding. Total EITC for 2018 was $64.9 bil ion.
Though childless taxpayers received 3% of al EITC dollars for 2018, they accounted for more
than a quarter (26%) of al EITC recipients. Thus, their smal share of total EITC dollars reflects,
in part, the lower credit amount available to childless filers.
Figure 7 shows the number of returns with the EITC for 2018 by number of qualifying children.
Figure 8 shows the average EITC for 2018 by number of qualifying children. The average EITC
for 2018 increased with the number of qualifying children:
 The EITC was received by 6.9 mil ion taxpayers with no qualifying children,
with an average credit of $302.
 The EITC was received by 9.6 mil ion filers with one qualifying child, with an
average credit of $2,396.
 The EITC was received by 6.6 mil ion filers with two qualifying children, with
an average credit of $3,847.
 The EITC was received by 3.3 mil ion filers with three or more qualifying
children, with an average credit of $4,311.
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Figure 7. Number of Tax Returns with the EITC by Number of Qualifying Children,
2018

Source: Congressional Research Service, based on data from the Internal Revenue Service, Statistics of Income,
SOI Tax Stats-Individual Statistical Tables by Size of Adjusted Gross Income, Table 2.5.
Notes: Detail does not add to total because of rounding. For detail on returns with the EITC by AGI and
number of qualifying children, see Table A-2.
Figure 8. Average EITC by Number of Qualifying Children, 2018

Source: Congressional Research Service, based on data from the Internal Revenue Service, Statistics of Income,
SOI Tax Stats-Individual Statistical Tables by Size of Adjusted Gross Income, Table 2.5.
Note: For detail on returns with the EITC by AGI and number of qualifying children, see Table A-2.
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By Income Level
Though the EITC is targeted toward lower-income earners, taxpayers with children may receive
the EITC even with income wel above the poverty level. (The federal poverty level for a family
of three is $21,720 in 2020; it was $20,780 in 2018.) However, the largest EITC benefits are
focused on low-income earners near the poverty line, with those with greater earned income
receiving reduced benefits.
Figure 9 shows the number of tax returns with the EITC for 2018 by adjusted gross income
(AGI) level. Figure 9 shows that the $10,000-$14,999 AGI bracket accounted for the greatest
number of 208 tax returns that included the EITC—5.8 mil ion. For 2018, close to half (45%) of
al returns with the EITC had AGIs below $15,000. For context, a full-time full-year worker
earning the federal minimum wage would have an AGI of $15,080.41
Figure 9 also shows the average EITC per return by AGI category. Average EITC benefits first
increase with AGI, then decline. This outcome reflects the formula for determining the EITC,
which provides an increasing credit up to a maximum amount, then ultimately a reduced credit as
it is phased out above a certain income threshold (see Table 1 and Figure 2). It also reflects a
difference in the mix of family types receiving the EITC in the various AGI categories. For
example, nearly three-quarters (73%) of al EITC recipients with AGIs of less than $5,000 had no
qualifying children. Al EITC recipients with AGIs above $25,000 for 2017 had qualifying
children, and hence were eligible for a larger maximum EITC benefit than filers without children.
For detail on returns with the EITC by AGI and number of qualifying children, see Table A-2.

41 40 hours per week for 52 weeks a year at $7.25 per hour.
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Figure 9. Number of Tax Returns with the EITC and Average EITC per Return by
Adjusted Gross Income (AGI), 2018

Source: Congressional Research Service, based on data from the Internal Revenue Service, Statistics of Income,
SOI Tax Stats-Individual Statistical Tables by Size of Adjusted Gross Income, Table 2.5.
Notes: For detail on returns with the EITC by AGI and number of qualifying children, see Table A-2. The AGI
categories are defined such that the lower bound is inclusive but upper bound is not inclusive. Hence AGI “$5K-
$10K” includes taxpayers with AGI $5,000 or more to under $10,000.
By Filing and Marital Status
The IRS’s National Taxpayer Advocate (NTA) provided data on EITC receipt by filing status in a
special 2019 report to Congress (the IRS does not routinely provide data on EITC receipt by
filing status in the Statistics of Income annual data releases). According to the NTA report, for
2017, unmarried taxpayers (head of household and single filing statuses) received approximately
three-quarters of al EITC dollars, with over half (59%) received by unmarried taxpayers with one
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or two qualifying children. Figure 10 shows estimates of the distribution of total EITC dollars by
filing status and number of qualifying children for 2017.
Figure 10. Distribution of Total EITC Dollars by Marital Status and Number of
Qualifying Children, 2017

Source: National Taxpayer Advocate, Earned Income Tax Credit, Special Report to Congress, Volume 3. Table
A.5.
By Region
For 2018, 18% of al taxpayers received the EITC. However, the share of taxpayers receiving the
EITC varies considerably by state. For 2018, the state with the highest percentage of returns
receiving the EITC was Mississippi, with 30% of al filers receiving the credit. In contrast, 11%
of al taxpayers in New Hampshire received the EITC for that year.
Figure 11 provides a map showing the percentage of al 2017 federal income tax returns that
included an EITC for each state. In addition to considerable state variation, the map shows that
there is a regional pattern to EITC receipt. A greater share of taxpayers in certain southern states
received the EITC than those in other regions of the country. The EITC was received on the
smal est percentage of returns in New England, as wel as some states in the northern Midwest.
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Figure 11. Percentage of Tax Returns with the EITC by State, 2018
AK
ME
WI
VT
NH
WA
MT
ND MN
IL
MI
NY
MA
OR
NV
WY
SD
IA
IN
OH
PA
NJ
CT
RI
CA
UT
CO
NE
MO
KY
WV
VA
MD
DE
< 15%
AZ
NM
KS
AR
TN
NC
SC
DC
15% - 20%
OK
LA
MS
AL
GA
20% - 25%
HI
TX
FL
> 25%

Source: Congressional Research Service, based on data from the Internal Revenue Service, Statistics of Income,
SOI Tax Stats-Historic Table 2, (Total File, Al States) at https://www.irs.gov/statistics/soi-tax-stats-historic-table-
2.
Notes: For details on EITC returns by state, see Table A-3.
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Appendix. Additional Tables
Table A-1. EITC Receipt, 1975-2018

In millions of nominal dollars

In millions of constant 2018 dollars
Total Refundable

Total Refundable

Portion

Portion

Tax

Returns
with
Reduces
Reduces
EITC
Total
Refunded
Other
Average
Total
Refunded
Other
Average
Year (Millions)
EITC
Amount
Taxes
EITC
EITC
Amount
Taxes
EITC
1975
6.215
$1,250
$887
$111
$201

$5,834
$4,139
$518
$939
1976
6.473
$1,295
$935
$119
$200

$5,714
$4,127
$523
$883
1977
5.627
$1,127
$875
$106
$200

$4,668
$3,624
$441
$830
1978
5.192
$1,048
$801
$94
$202

$4,037
$3,086
$363
$778
1979
7.135
$2,052
$1,395
$161
$288

$7,097
$4,826
$557
$995
1980
6.954
$1,986
$1,370
$164
$286

$6,052
$4,175
$501
$870
1981
6.717
$1,912
$1,278
$181
$285

$5,281
$3,531
$499
$786
1982
6.395
$1,775
$1,222
$194
$278

$4,620
$3,179
$505
$722
1983
7.368
$1,794
$1,289
$190
$243

$4,522
$3,250
$479
$614
1984
6.376
$1,636
$1,162
$193
$257

$3,953
$2,807
$467
$620
1985
7.432
$2,088
$1,499
$209
$281

$4,872
$3,498
$488
$656
1986
7.156
$2,009
$1,479
$201
$281

$4,604
$3,388
$460
$643
1987
8.738
$3,931
$2,930
$359
$450

$8,688
$6,476
$794
$994
1988
11.148
$5,896
$4,257
$537
$529
$12,516
$9,037
$1,139
$1,123
1989
11.696
$6,595
$4,636
$580
$564
$13,356
$9,387
$1,175
$1,142
1990
12.542
$7,542
$5,266
$659
$601
$14,490
$10,117
$1,267
$1,155
1991
13.665
$11,105
$8,183
$840
$813
$20,474
$15,087
$1,548
$1,498
1992
14.097
$13,028
$9,959
$1,010
$924
$23,317
$17,824
$1,808
$1,654
1993
15.117
$15,537
$12,028
$1,208
$1,028
$26,999
$20,902
$2,100
$1,786
1994
19.017
$21,105
$16,598
$1,722
$1,110
$35,760
$28,123
$2,918
$1,880
1995
19.334
$25,956
$20,829
$1,981
$1,342
$42,767
$34,319
$3,264
$2,212
1996
19.464
$28,825
$23,157
$2,105
$1,481
$46,133
$37,061
$3,369
$2,370
1997
19.391
$30,389
$24,396
$2,225
$1,567
$47,544
$38,168
$3,481
$2,452
1998
20.273
$31,592
$27,002
$2,358
$1,558
$48,668
$41,597
$3,633
$2,401
1999
19.259
$31,901
$27,604
$2,379
$1,656
$48,083
$41,606
$3,586
$2,497
2000
19.277
$32,296
$27,804
$2,524
$1,675
$47,095
$40,545
$3,680
$2,443
2001
19.593
$33,376
$29,043
$2,863
$1,703
$47,323
$41,179
$4,059
$2,415
2002
21.574
$38,199
$33,737
$3,347
$1,771
$53,318
$47,091
$4,671
$2,471
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The Earned Income Tax Credit (EITC): How It Works and Who Receives It

In millions of nominal dollars

In millions of constant 2018 dollars
Total Refundable

Total Refundable

Portion

Portion

Tax

Returns
with
Reduces
Reduces
EITC
Total
Refunded
Other
Average
Total
Refunded
Other
Average
Year (Millions)
EITC
Amount
Taxes
EITC
EITC
Amount
Taxes
EITC
2003
22.112
$38,657
$34,012
$3,718
$1,748
$52,756
$46,417
$5,074
$2,386
2004
22.270
$40,024
$35,300
$3,957
$1,797
$53,204
$46,924
$5,260
$2,389
2005
22.752
$42,410
$37,465
$4,200
$1,864
$54,529
$48,171
$5,400
$2,397
2006
23.042
$44,388
$39,072
$4,518
$1,926
$55,288
$48,667
$5,628
$2,399
2007
24.584
$48,540
$42,508
$5,098
$1,974
$58,786
$51,480
$6,174
$2,391
2008
24.756
$50,669
$44,260
$5,438
$2,047
$59,095
$51,621
$6,343
$2,387
2009
27.041
$59,239
$53,985
$4,765
$2,191
$69,337
$63,188
$5,577
$2,564
2010
27.368
$59,562
$54,256
$4,855
$2,176
$68,590
$62,480
$5,591
$2,506
2011
27.912
$62,906
$55,350
$6,469
$2,254
$70,224
$61,790
$7,221
$2,516
2012
27.848
$64,129
$56,190
$6,726
$2,303
$70,137
$61,455
$7,356
$2,519
2013
28.822
$68,084
$59,145
$7,645
$2,362
$73,389
$63,753
$8,241
$2,546
2014
28.538
$68,339
$58,889
$8,063
$2,395
$72,488
$62,464
$8,553
$2,540
2015
28.082
$68,525
$58,795
$8,240
$2,440
$72,599
$62,290
$8,730
$2,585
2016
27.385
$66,723
$57,054
$8,266
$2,436
$69,809
$59,693
$8,649
$2,549
2017
27.030
$66,443
$56,751
$8,176
$2,458
$68,066
$58,137
$8,375
$2,518
2018
26.492
$64,924
$56,161
$8,145
$2,451
$64,924
$56,161
$8,145
$2,451
Source: Congressional Research Service. For pre-1996 data, see U.S. Congress, House Committee on Ways
and Means, 2004 Green Book, Background Material and Data on Programs Within the Jurisdiction of the Committee on
Ways and Means, 108th Congress, 2nd session, WMCP 108-6, March 2004, pp. 41; and Individual Income Tax
Return Reports available at the IRS SOI Tax Stats Archive-1954 to 1999 Individual Income Tax Return Reports.
For 1996 and later data, see Internal Revenue Service, Statistics of Income, SOI Tax Stats-Individual Statistical Tables
by Size of Adjusted Gross Income, Table 2.5.
Note: Constant 2018 dol ars were computed using the annual average (not-seasonal y adjusted) Consumer Price
Index for al Urban Consumers (CPI-U) from the Bureau of Labor Statistics.
Table A-2. Average EITC, Number of Tax Returns with the EITC, and Total EITC
by Qualifying Children and Adjusted Gross Income, 2018
Three or
No
One
Two
More
Qualifying
Qualifying
Qualifying
Qualifying
AGI
Total
Children
Child
Children
Children
Average EITC
Less than $5,000
$511
$218
$1,158
$1,518
$1,847
$5,000 to $9,999
$1,344
$462
$2,652
$3,077
$3,378
$10,000 to $14,999
$2,508
$235
$3,415
$5,162
$5,829
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The Earned Income Tax Credit (EITC): How It Works and Who Receives It

Three or
No
One
Two
More
Qualifying
Qualifying
Qualifying
Qualifying
AGI
Total
Children
Child
Children
Children
$15,000 to $19,999
$4,282
$185
$3,398
$5,625
$6,344
$20,000 to $24,999
$4,038
$35
$2,896
$5,057
$5,817
$25,000 to $29,999
$3,222
$0
$2,177
$4,139
$5,030
$30,000 to $34,999
$2,411
$0
$1,435
$3,083
$3,959
$35,000 to $39,999
$1,564
$0
$659
$2,197
$3,055
$40,000 to $44,999
$1,242
$0
$460
$1,212
$2,036
$45,000 and higher
$754
$0
$0
$609
$929
Al
$2,451
$302
$2,396
$3,847
$4,311
Tax Returns with the EITC
Less than $5,000
2,351,171
1,722,894
409,966
156,507
61,804
$5,000 to $9,999
3,659,936
2,301,641
858,594
359,425
140,274
$10,000 to $14,999
5,786,910
2,512,229
1,859,511
1,011,105
404,067
$15,000 to $19,999
3,411,413
351,250
1,380,101
1,120,351
559,712
$20,000 to $24,999
2,728,099
47,719
1,328,734
917,142
434,505
$25,000 to $29,999
2,600,123
0
1,396,290
806,103
397,730
$30,000 to $34,999
2,220,011
0
1,088,249
787,962
343,801
$35,000 to $39,999
1,979,950
0
1,005,133
634,287
340,530
$40,000 to $44,999
1,054,304
0
248,147
540,604
265,553
$45,000 and higher
700,570
0
33,644
295,077
371,849
Total
26,492,487
6,935,733
9,608,369
6,628,563
3,319,825
Total EITC ($ in Thousands)
Less than $5,000
$1,201,920
$375,563
$474,669
$237,550
$114,143
$5,000 to $9,999
$4,919,147
$1,062,593
$2,276,586
$1,106,079
$473,891
$10,000 to $14,999
$14,516,061
$590,473
$6,350,950
$5,219,211
$2,355,429
$15,000 to $19,999
$14,607,305
$64,815
$4,690,167
$6,301,634
$3,550,689
$20,000 to $24,999
$11,015,573
$1,673
$3,848,036
$4,638,376
$2,527,488
$25,000 to $29,999
$8,376,705
$0
$3,039,687
$3,336,308
$2,000,709
$30,000 to $34,999
$5,352,729
$0
$1,562,135
$2,429,458
$1,361,136
$35,000 to $39,999
$3,096,290
$0
$662,264
$1,393,588
$1,040,439
$40,000 to $44,999
$1,309,892
$0
$114,137
$654,987
$540,768
$45,000 and higher
$527,931
$0
$2,737
$179,628
$345,567
Total
$64,923,553
$2,095,117
$23,021,368
$25,496,819
$14,310,259
Source: Congressional Research Service, based on data from the Internal Revenue Service, Statistics of Income,
SOI Tax Stats-Individual Statistical Tables by Size of Adjusted Gross Income, Table 2.5.

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The Earned Income Tax Credit (EITC): How It Works and Who Receives It

Table A-3. EITC Receipt by State, 2018
Percentage
Tax
of Total
Returns
Tax
Total
Percentage
Total Tax
with
Returns
EITC
Average
of Credit
State or Area
Returns
EITC
with EITC
(millions)
EITC
Refundeda
United States
153,455,990 26,142,740
17.0%
$64,061
$2,450
86.6%
Alabama
2,062,260
481,700
23.4%
$1,349
$2,800
89.6%
Alaska
348,990
45,960
13.2%
$97
$2,109
90.1%
Arizona
3,094,210
576,720
18.6%
$1,480
$2,566
87.9%
Arkansas
1,236,750
288,810
23.4%
$773
$2,678
88.7%
California
18,175,520
2,926,160
16.1%
$6,740
$2,303
83.4%
Colorado
2,765,420
343,460
12.4%
$745
$2,170
85.3%
Connecticut
1,768,690
221,490
12.5%
$492
$2,222
87.7%
Delaware
469,860
73,850
15.7%
$176
$2,384
90.8%
District of Columbia
350,010
50,200
14.3%
$117
$2,331
88.2%
Florida
10,229,050
2,179,310
21.3%
$5,377
$2,467
83.9%
Georgia
4,581,030
1,071,370
23.4%
$2,945
$2,749
86.2%
Hawai
694,860
96,910
13.9%
$209
$2,157
88.6%
Idaho
783,400
128,030
16.3%
$294
$2,296
86.9%
Il inois
6,116,510
943,370
15.4%
$2,342
$2,483
86.7%
Indiana
3,150,350
519,670
16.5%
$1,259
$2,422
89.5%
Iowa
1,458,970
198,710
13.6%
$457
$2,300
89.4%
Kansas
1,335,070
200,140
15.0%
$476
$2,379
89.5%
Kentucky
1,921,470
385,990
20.1%
$952
$2,466
88.7%
Louisiana
1,962,700
500,940
25.5%
$1,434
$2,863
88.4%
Maine
666,480
97,020
14.6%
$203
$2,093
86.3%
Maryland
3,004,390
406,880
13.5%
$940
$2,310
85.8%
Massachusetts
3,488,510
392,470
11.3%
$824
$2,100
87.7%
Michigan
4,786,230
763,940
16.0%
$1,900
$2,487
87.2%
Minnesota
2,796,040
324,340
11.6%
$710
$2,190
88.1%
Mississippi
1,227,720
364,350
29.7%
$1,057
$2,901
88.9%
Missouri
2,809,860
488,370
17.4%
$1,195
$2,447
89.1%
Montana
511,440
76,270
14.9%
$164
$2,155
87.6%
Nebraska
909,600
128,740
14.2%
$304
$2,363
89.2%
Nevada
1,449,560
261,980
18.1%
$632
$2,414
87.5%
New Hampshire
712,090
72,140
10.1%
$141
$1,952
86.9%
New Jersey
4,462,740
599,550
13.4%
$1,402
$2,338
85.1%
New Mexico
929,110
204,320
22.0%
$501
$2,450
90.7%
New York
9,742,580
1,662,500
17.1%
$3,864
$2,324
84.3%
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link to page 28 link to page 28 link to page 30 link to page 30 The Earned Income Tax Credit (EITC): How It Works and Who Receives It

Percentage
Tax
of Total
Returns
Tax
Total
Percentage
Total Tax
with
Returns
EITC
Average
of Credit
State or Area
Returns
EITC
with EITC
(millions)
EITC
Refundeda
North Carolina
4,638,600
913,240
19.7%
$2,277
$2,493
87.7%
North Dakota
363,760
42,760
11.8%
$94
$2,194
89.7%
Ohio
5,624,050
903,470
16.1%
$2,217
$2,453
89.3%
Oklahoma
1,639,850
330,840
20.2%
$845
$2,553
88.1%
Oregon
1,965,610
265,330
13.5%
$555
$2,093
87.8%
Pennsylvania
6,260,030
907,050
14.5%
$2,067
$2,278
89.6%
Rhode Island
541,700
81,480
15.0%
$186
$2,279
88.4%
South Carolina
2,276,120
478,920
21.0%
$1,226
$2,560
88.8%
South Dakota
421,160
59,670
14.2%
$135
$2,257
90.3%
Tennessee
3,055,660
617,790
20.2%
$1,572
$2,544
86.8%
Texas
12,640,440
2,670,340
21.1%
$7,272
$2,723
84.8%
Utah
1,363,530
185,250
13.6%
$425
$2,292
87.7%
Vermont
328,540
41,630
12.7%
$81
$1,945
85.6%
Virginia
3,983,910
596,880
15.0%
$1,398
$2,343
87.3%
Washington
3,623,110
416,530
11.5%
$900
$2,161
88.2%
West Virginia
765,060
143,210
18.7%
$337
$2,356
91.6%
Wisconsin
2,875,130
358,720
12.5%
$806
$2,247
89.8%
Wyoming
273,350
35,280
12.9%
$77
$2,170
89.4%
Other Areas
785,930
20,650
2.6%
$44
$2,114
95.7%
Source: Congressional Research Service, based on data from the Internal Revenue Service, Statistics of Income,
SOI Tax Stats- Historic Table 2, (Total File, Al States) at https://www.irs.gov/statistics/soi-tax-stats-historic-table-
2.
Note: Totals in this table differ slightly from total shown in Table A-2. Although the figures in Table A-2 and
Table A-3 are both based on data from the IRS, the data in Table A-3 include “substitutes for returns” in which
the IRS constructs tax returns for certain nonfilers. “Other Areas” includes, for example, returns filed from
Army Post Office and Fleet Post Office addresses by members of the Armed Forces stationed overseas; returns
filed by other U.S. citizens abroad; and returns filed by residents of Puerto Rico with income from sources
outside Puerto Rico or with income earned as U.S. government employees.
a. The refunded amount is the part of the refundable portion of the credit that remains after the credit has
offset other taxes like self-employment taxes and unpaid Social Security and Medicare payrol taxes
col ected on the federal income tax return (i.e., Form 1040).
Table A-4. EITC Participation Rates by State, 2009-2016

Participation rate
State
2016
2015
2014
2013
2012
2011
2010
2009
Alabama
79.8%
82.0%
82.1%
81.9%
82.1%
81.0%
79.9%
82.1%
Alaska
71.9%
72.8%
76.7%
78.5%
75.6%
81.2%
76.2%
71.0%
Arizona
76.7%
76.5%
77.4%
77.0%
76.6%
75.7%
74.5%
76.9%
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The Earned Income Tax Credit (EITC): How It Works and Who Receives It

Participation rate
State
2016
2015
2014
2013
2012
2011
2010
2009
Arkansas
80.0%
80.0%
80.6%
81.6%
81.6%
80.8%
80.9%
81.7%
California
73.8%
74.7%
75.8%
75.4%
74.3%
73.1%
71.0%
78.6%
Colorado
74.5%
73.8%
74.5%
73.9%
73.5%
74.9%
71.6%
75.5%
Connecticut
78.6%
79.2%
78.6%
78.9%
81.3%
77.7%
77.1%
79.6%
Delaware
74.0%
78.5%
79.4%
82.3%
82.0%
83.6%
77.9%
79.8%
District of Columbia
71.0%
82.0%
71.9%
72.2%
75.2%
76.1%
74.0%
75.0%
Florida
81.7%
82.0%
82.1%
83.4%
82.8%
82.6%
81.0%
81.0%
Georgia
79.9%
80.9%
81.2%
80.8%
80.8%
79.1%
79.0%
81.2%
Hawai
81.7%
80.9%
82.5%
84.9%
80.2%
79.9%
81.1%
81.8%
Idaho
78.5%
78.5%
81.2%
80.1%
83.2%
78.3%
83.2%
80.1%
Il inois
78.5%
78.3%
79.0%
79.2%
78.5%
77.5%
77.7%
81.5%
Indiana
79.5%
81.8%
80.5%
82.8%
80.7%
80.7%
81.0%
83.0%
Iowa
79.3%
78.7%
79.2%
79.6%
79.1%
78.7%
79.3%
80.8%
Kansas
74.9%
77.3%
77.1%
79.8%
78.3%
79.2%
78.2%
78.0%
Kentucky
81.5%
82.0%
80.5%
81.1%
82.7%
81.9%
79.6%
81.4%
Louisiana
80.4%
79.2%
80.2%
80.5%
81.7%
81.4%
80.0%
80.4%
Maine
77.9%
79.5%
81.0%
77.9%
81.5%
80.4%
79.3%
81.4%
Maryland
78.3%
78.8%
77.6%
78.7%
78.3%
79.4%
76.4%
80.0%
Massachusetts
79.4%
80.8%
80.0%
79.8%
79.7%
78.1%
77.0%
78.0%
Michigan
80.4%
80.9%
80.9%
82.0%
81.6%
81.9%
80.4%
81.0%
Minnesota
78.9%
78.9%
78.7%
80.6%
79.7%
79.4%
78.0%
79.3%
Mississippi
82.4%
84.8%
84.1%
84.7%
84.5%
84.3%
85.2%
83.1%
Missouri
78.4%
80.7%
80.3%
80.0%
80.9%
81.0%
79.9%
80.2%
Montana
78.7%
77.4%
76.0%
76.5%
78.4%
80.3%
77.3%
74.6%
Nebraska
82.4%
76.9%
79.9%
78.1%
80.2%
77.6%
79.0%
83.3%
Nevada
74.6%
75.3%
76.3%
75.4%
73.7%
73.6%
71.5%
76.9%
New Hampshire
74.6%
80.6%
78.4%
79.9%
79.3%
81.5%
77.4%
80.3%
New Jersey
77.5%
78.8%
78.6%
77.2%
79.1%
77.8%
75.7%
79.7%
New Mexico
78.2%
75.3%
80.8%
82.1%
81.1%
81.8%
75.7%
81.4%
New York
81.7%
82.5%
82.4%
82.9%
82.8%
82.5%
79.7%
82.6%
North Carolina
79.9%
80.2%
80.0%
81.0%
81.0%
77.2%
76.9%
79.9%
North Dakota
78.2%
82.9%
83.0%
80.4%
76.1%
82.4%
82.3%
80.4%
Ohio
81.3%
82.3%
82.6%
82.0%
81.6%
82.5%
81.4%
82.0%
Oklahoma
74.2%
76.7%
76.1%
77.5%
78.1%
78.4%
75.8%
78.2%
Oregon
73.4%
75.5%
72.5%
74.4%
73.4%
72.6%
71.0%
74.7%
Pennsylvania
80.9%
82.4%
82.0%
82.6%
82.2%
81.7%
81.9%
81.7%
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The Earned Income Tax Credit (EITC): How It Works and Who Receives It

Participation rate
State
2016
2015
2014
2013
2012
2011
2010
2009
Rhode Island
85.8%
84.3%
82.8%
81.3%
81.2%
84.9%
81.0%
83.1%
South Carolina
78.4%
79.6%
80.9%
81.9%
84.5%
82.0%
80.3%
81.1%
South Dakota
82.8%
77.2%
82.5%
84.6%
81.1%
83.0%
84.2%
77.8%
Tennessee
81.4%
81.8%
80.9%
83.2%
83.0%
82.0%
80.1%
81.2%
Texas
77.8%
78.5%
79.1%
79.5%
79.1%
78.3%
76.8%
80.9%
Utah
75.0%
74.9%
75.2%
76.3%
77.3%
75.3%
75.0%
78.2%
Vermont
84.0%
80.3%
80.7%
81.9%
80.6%
79.0%
82.9%
82.6%
Virginia
78.7%
79.5%
80.5%
81.1%
80.7%
79.8%
79.0%
79.5%
Washington
74.8%
75.3%
76.9%
78.0%
76.8%
76.4%
73.1%
76.5%
West Virginia
80.9%
82.2%
83.2%
82.6%
81.1%
83.4%
83.1%
80.0%
Wisconsin
79.6%
79.1%
80.0%
78.8%
78.4%
79.9%
78.3%
81.7%
Wyoming
74.6%
76.9%
79.8%
78.1%
78.6%
77.7%
76.3%
73.6%
Source: IRS-ACS Match- Center for Administrative Records Research and Applications, U.S. Census Bureau in
col aboration with IRS. Data can be found at https://www.eitc.irs.gov/eitc-central/participation-rate/eitc-
participation-rate-by-states.
Notes: The IRS data used in these estimates are based on the year of the tax return. In other words, 2016 data
reflect tax data from 2016 income tax returns, general y filed in 2017. The national EITC participation rate is
estimated using the Census Bureau’s Current Population Survey (CPS) and hence not directly comparable to
these state estimates, which are based on the American Community Survey (ACS).

Author Information

Margot L. Crandall-Hollick
Conor F. Boyle
Acting Section Research Manager
Analyst in Social Policy

Gene Falk

Specialist in Social Policy

Acknowledgments
The authors would like to thank Joseph Hughes, Research Assistant in the Government Finance and
Taxation Section, for his assistance in updating this report and CRS Visual Information Specialist Jamie
Hutchinson for creating the original figures in this report.
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The Earned Income Tax Credit (EITC): How It Works and Who Receives It

Disclaimer
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Congressional Research Service
R43805 · VERSION 14 · UPDATED
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