Jane R. Williams and Elizabeth Kneebone | April 15, 2014 11:22am
This Tax Day we want to draw your attention to newly-released resources that demonstrate the widespread impact of federal tax policies targeted to low- and moderate-income working families, particularly the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC).
New IRS data for Tax Year 2012, now available through our EITC Interactive, show that in 2012, 26.2 million filers received the EITC, claiming an average credit of $2,359. Almost 60 percent (15.7 million) of EITC filers also went on to receive the refundable portion of the Child Tax Credit, claiming an additional $1,266 on average.
These refundable tax credits not only encourage and support work but also offer an effective poverty alleviation tool. As we wrote earlier this year, according to the Census Bureau’s Supplemental Poverty Measure (SPM), nationally the poverty rate would have been 3 percentage points higher in 2012 without the EITC and the refundable portion of the CTC. For children, the impact of these credits was even greater, effectively lowering the child poverty rate by 6.7 percentage points.
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