EITC Funders Network
The EITC Funders Network brings together funders interested in the Earned Income Tax Credit, free- and low-cost tax preparation, and asset building. The Network seeks to increase awareness of EITC-related projects, foster collaboration, share information about the current status of EITC-related work, and help shape the future of the field.
Read more about the EITC Funders Network.
What is the Earned Income Tax Credit?
The Earned Income Tax Credit (EITC) is a federal tax credit for people who work and have earned income below about $38,000 per year. The EITC reduces the amount of federal taxes owed and may also provide a refund.
The EITC is targeted at working poor families with children, although a small credit is also available for low-income workers without children. The amount of EITC a taxpayer is eligible for varies by income level and number of people in the household. For example, in tax year 2007 the maximum credit for a family with two or more children is $4,716, the maximum EITC for a family with one child is $2,853, and the maximum EITC for a family with no children is $428.
Because the EITC puts money back into the pockets of low-income families, the EITC has been called one of the largest and most effective poverty-reduction programs in the nation. Each year, the federal EITC lifts more than 4 million people out of poverty each year - putting thousands of dollars back in the pockets of working families.
In addition, there are now 24 states (including the District of Columbia) with a state EITC.