EITCs Boost Financial Security of Working Families
The federal and state Earned Income Tax Credits (EITC) helped boost economic prosperity of low income workers with children, by reducing taxes or providing a refund to filers who do not owe taxes. As one of the largest social safety net programs, the federal EITC had added $7.3 billion to local economies and assisted 35% of children in California, according to an analysis recently released by the Public Policy Institute of California. The EITC incentivized employment and reduced the need for welfare dependency. The analysis also suggested that major expansions in the federal EITC are responsible for better infant and maternal health outcomes and improved academic performance among children. The creation of California Earned Income Tax Credits in 2015, known as CalEITC, has been credited to boost economic security of working families and help to reap the benefits of federal EITC according to the California Budget and Policy Center. Bolstering community-based efforts to promote CalEITC could be one of key strategies to maximize the success of the program. CalEITC is a critical public policy tool that helps lift struggling families out of poverty and strengthen their financial security. California policymakers have the opportunity to build on this progress by expanding the CalEITC so that more individuals and families benefit from it.