The Earned Income Tax Credit (EITC): Percentage of Total Tax Returns and Credit Amount by State
Order Code RS22316
Updated November 21, 2006
CRS 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)1
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% of
1 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.
Congressional Research Service ˜ The Library of Congress
CRS-2
all federal tax returns claiming the EITC and 35.8% of the total EITC amount in tax year
2004. Alternatively, the distribution can be shown using the percentage of federal total
tax returns filed from a state claiming the EITC. In tax year 2004, for the United States
(the sum of all states and the District of Columbia, not including outlying areas), 17.0%
of total federal income tax returns claimed an EITC, with an average EITC of $1,816.61.
The Percentage of Tax Returns Claiming the EITC
The percentage of federal tax returns filed from a state claiming the EITC is an
indicator of the dependence of state residents on the EITC. It can also be viewed as an
indicator of the relative income of states. States with a higher proportion of lower income
working residents (particularly those with children) will have a higher percentage of
federal tax returns filed from the state claiming the EITC. For tax year 2004, the District
of Columbia and 18 states had a share of federal tax returns claiming the EITC that was
greater than or equal to the U.S. average (for all states and the District of Columbia) of
17.0%. Thirty-two states had a percentage of federal tax returns with an EITC that was
lower than the U.S. average.2
The percentage of federal tax returns claiming an EITC ranged from a low of 9.9%
in New Hampshire to a high of 32.1% in Mississippi. Map 1 shows a graphical
presentation of the percentage of federal tax returns claiming the EITC by state. Table
1 provides data on the number of federal tax returns filed by state and the percentage of
federal tax returns claiming an EITC by state in tax year 2004.
The Average Amount of the EITC
The amount of the EITC depends upon income and the number of qualifying
children. For tax year 2004, the maximum EITC for individuals and married couples was
$390 with no qualifying children, $2,064 with one qualified child, and $4,300 for two or
more qualifying children. However, these maximum credit amounts are only for
individuals and couples with incomes below the levels at which the credit begins to phase
out. For tax year 2004, the income level at which the EITC began to phase out was
$6,390 if the tax filer had no qualifying children and $14,040 if the tax filer had one or
more qualifying children. For married tax filers filing a joint return, the income levels
were $1,000 higher. Tax filers received no EITC in tax year 2004 if they had an adjusted
gross income of more than $11,490 with no children, $30,338 ($31,338 if married) with
one child, and $34,458 ($35,458 if married) with two or more children. Map 2 shows a
graphical presentation of the average EITC amount by state.
2 All percentages and dollar amounts in this report were prepared by the Congressional Research
Service using Internal Revenue Service’s Historical table 2 (Statistics of Income Bulletin) for all
states and the United States, available at [http://www.irs.gov/pub/irs-soi/04in54cm.xls]. EITC
includes the EITC applied against tax liability and the excess (refunded) EITC.
CRS-3
Map 1. Percentage of Tax Year 2004 Tax Returns with an Earned
Income Tax Credit, by State
Map 2. The Average Earned Income Tax Credit Amount for
Tax Year 2004, by State
CRS-4
Table 1. Total Number of Tax Returns, Percentage of Federal Tax
Returns Claiming an Earned Income Tax Credit (EITC), and Average
EITC by State, Tax Year 2004
Number of
Percentage of Federal
Average
Federal Tax
Tax Returns Claiming
EITCa
Returns
the EITC
Alabama
1,910,403
25.7%
$2,083.52
Alaska
345,209
11.8
1,527.60
Arizona
2,372,519
17.2
1,813.15
Arkansas
1,136,031
24.8
1,938.93
California
15,327,238
16.4
1,775.02
Colorado
2,110,355
12.8
1,627.89
Connecticut
1,665,154
10.2
1,608.43
Delaware
395,657
14.7
1,750.03
District of Columbia
277,884
18.0
1,725.99
Florida
8,173,271
19.8
1,816.56
Georgia
3,782,867
22.9
2,001.57
Hawaii
606,129
14.6
1,594.50
Idaho
594,282
17.4
1,732.28
Illinois
5,762,889
15.1
1,817.03
Indiana
2,854,911
15.2
1,740.50
Iowa
1,334,499
13.0
1,615.21
Kansas
1,229,497
14.5
1,711.95
Kentucky
1,757,624
19.7
1,763.12
Louisiana
1,869,153
28.9
2,143.30
Maine
618,852
14.1
1,582.82
Maryland
2,635,590
13.3
1,709.19
Massachusetts
3,061,220
10.3
1,571.31
Michigan
4,561,087
14.5
1,763.87
Minnesota
2,407,792
11.0
1,562.35
Mississippi
1,165,951
32.1
2,129.79
Missouri
2,585,513
17.2
1,765.92
Montana
439,714
17.0
1,648.58
Nebraska
808,780
13.8
1,690.85
Nevada
1,092,600
15.0
1,684.36
New Hampshire
643,076
9.9
1,535.66
New Jersey
4,107,118
12.1
1,726.92
New Mexico
827,182
24.1
1,826.27
New York
8,625,432
17.5
1,774.26
North Carolina
3,769,920
20.3
1,871.83
North Dakota
305,030
13.1
1,611.43
Ohio
5,447,064
14.7
1,755.28
Oklahoma
1,476,128
21.4
1,849.53
Oregon
1,604,383
14.4
1,631.29
Pennsylvania
5,811,227
13.5
1,666.53
Rhode Island
500,314
13.3
1,702.78
CRS-5
Number of
Percentage of Federal
Average
Federal Tax
Tax Returns Claiming
EITCa
Returns
the EITC
South Carolina
1,844,497
23.4
1,911.35
South Dakota
362,240
15.4
1,656.80
Tennessee
2,606,931
21.2
1,852.89
Texas
9,431,995
23.5
2,030.83
Utah
996,414
14.4
1,743.63
Vermont
306,271
12.6
1,491.93
Virginia
3,491,196
14.3
1,747.99
Washington
2,860,940
12.7
1,653.12
West Virginia
747,838
19.4
1,702.65
Wisconsin
2,621,165
11.4
1,626.33
Wyoming
243,718
13.9
1,612.45
U.S. Total
1,579,815
17.0%
$1,816.22
Source: Table Prepared by the Congressional Research Service from Internal Revenue Service, Historical
table 2 (Statistics of Income Bulletin), available at [http://www.irs.gov/pub/irs-soi/04in54cm.xls].
a. Earned income tax credit is total EITC and reflects both the portion applied against tax liability and any
excess refunded to tax filers.
Updated November 21, 2006
CRS 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)1
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% of
1 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.
Congressional Research Service ˜ The Library of Congress
CRS-2
all federal tax returns claiming the EITC and 35.8% of the total EITC amount in tax year
2004. Alternatively, the distribution can be shown using the percentage of federal total
tax returns filed from a state claiming the EITC. In tax year 2004, for the United States
(the sum of all states and the District of Columbia, not including outlying areas), 17.0%
of total federal income tax returns claimed an EITC, with an average EITC of $1,816.61.
The Percentage of Tax Returns Claiming the EITC
The percentage of federal tax returns filed from a state claiming the EITC is an
indicator of the dependence of state residents on the EITC. It can also be viewed as an
indicator of the relative income of states. States with a higher proportion of lower income
working residents (particularly those with children) will have a higher percentage of
federal tax returns filed from the state claiming the EITC. For tax year 2004, the District
of Columbia and 18 states had a share of federal tax returns claiming the EITC that was
greater than or equal to the U.S. average (for all states and the District of Columbia) of
17.0%. Thirty-two states had a percentage of federal tax returns with an EITC that was
lower than the U.S. average.2
The percentage of federal tax returns claiming an EITC ranged from a low of 9.9%
in New Hampshire to a high of 32.1% in Mississippi. Map 1 shows a graphical
presentation of the percentage of federal tax returns claiming the EITC by state. Table
1 provides data on the number of federal tax returns filed by state and the percentage of
federal tax returns claiming an EITC by state in tax year 2004.
The Average Amount of the EITC
The amount of the EITC depends upon income and the number of qualifying
children. For tax year 2004, the maximum EITC for individuals and married couples was
$390 with no qualifying children, $2,064 with one qualified child, and $4,300 for two or
more qualifying children. However, these maximum credit amounts are only for
individuals and couples with incomes below the levels at which the credit begins to phase
out. For tax year 2004, the income level at which the EITC began to phase out was
$6,390 if the tax filer had no qualifying children and $14,040 if the tax filer had one or
more qualifying children. For married tax filers filing a joint return, the income levels
were $1,000 higher. Tax filers received no EITC in tax year 2004 if they had an adjusted
gross income of more than $11,490 with no children, $30,338 ($31,338 if married) with
one child, and $34,458 ($35,458 if married) with two or more children. Map 2 shows a
graphical presentation of the average EITC amount by state.
2 All percentages and dollar amounts in this report were prepared by the Congressional Research
Service using Internal Revenue Service’s Historical table 2 (Statistics of Income Bulletin) for all
states and the United States, available at [http://www.irs.gov/pub/irs-soi/04in54cm.xls]. EITC
includes the EITC applied against tax liability and the excess (refunded) EITC.
CRS-3
Map 1. Percentage of Tax Year 2004 Tax Returns with an Earned
Income Tax Credit, by State
Map 2. The Average Earned Income Tax Credit Amount for
Tax Year 2004, by State
CRS-4
Table 1. Total Number of Tax Returns, Percentage of Federal Tax
Returns Claiming an Earned Income Tax Credit (EITC), and Average
EITC by State, Tax Year 2004
Number of
Percentage of Federal
Average
Federal Tax
Tax Returns Claiming
EITCa
Returns
the EITC
Alabama
1,910,403
25.7%
$2,083.52
Alaska
345,209
11.8
1,527.60
Arizona
2,372,519
17.2
1,813.15
Arkansas
1,136,031
24.8
1,938.93
California
15,327,238
16.4
1,775.02
Colorado
2,110,355
12.8
1,627.89
Connecticut
1,665,154
10.2
1,608.43
Delaware
395,657
14.7
1,750.03
District of Columbia
277,884
18.0
1,725.99
Florida
8,173,271
19.8
1,816.56
Georgia
3,782,867
22.9
2,001.57
Hawaii
606,129
14.6
1,594.50
Idaho
594,282
17.4
1,732.28
Illinois
5,762,889
15.1
1,817.03
Indiana
2,854,911
15.2
1,740.50
Iowa
1,334,499
13.0
1,615.21
Kansas
1,229,497
14.5
1,711.95
Kentucky
1,757,624
19.7
1,763.12
Louisiana
1,869,153
28.9
2,143.30
Maine
618,852
14.1
1,582.82
Maryland
2,635,590
13.3
1,709.19
Massachusetts
3,061,220
10.3
1,571.31
Michigan
4,561,087
14.5
1,763.87
Minnesota
2,407,792
11.0
1,562.35
Mississippi
1,165,951
32.1
2,129.79
Missouri
2,585,513
17.2
1,765.92
Montana
439,714
17.0
1,648.58
Nebraska
808,780
13.8
1,690.85
Nevada
1,092,600
15.0
1,684.36
New Hampshire
643,076
9.9
1,535.66
New Jersey
4,107,118
12.1
1,726.92
New Mexico
827,182
24.1
1,826.27
New York
8,625,432
17.5
1,774.26
North Carolina
3,769,920
20.3
1,871.83
North Dakota
305,030
13.1
1,611.43
Ohio
5,447,064
14.7
1,755.28
Oklahoma
1,476,128
21.4
1,849.53
Oregon
1,604,383
14.4
1,631.29
Pennsylvania
5,811,227
13.5
1,666.53
Rhode Island
500,314
13.3
1,702.78
CRS-5
Number of
Percentage of Federal
Average
Federal Tax
Tax Returns Claiming
EITCa
Returns
the EITC
South Carolina
1,844,497
23.4
1,911.35
South Dakota
362,240
15.4
1,656.80
Tennessee
2,606,931
21.2
1,852.89
Texas
9,431,995
23.5
2,030.83
Utah
996,414
14.4
1,743.63
Vermont
306,271
12.6
1,491.93
Virginia
3,491,196
14.3
1,747.99
Washington
2,860,940
12.7
1,653.12
West Virginia
747,838
19.4
1,702.65
Wisconsin
2,621,165
11.4
1,626.33
Wyoming
243,718
13.9
1,612.45
U.S. Total
1,579,815
17.0%
$1,816.22
Source: Table Prepared by the Congressional Research Service from Internal Revenue Service, Historical
table 2 (Statistics of Income Bulletin), available at [http://www.irs.gov/pub/irs-soi/04in54cm.xls].
a. Earned income tax credit is total EITC and reflects both the portion applied against tax liability and any
excess refunded to tax filers.