How Much Would a State Earned Income Tax Credit Cost In 2009?
Publication Date: March 2008
Special Collection: John D. and Catherine T. MacArthur Foundation
Keywords: Economic projections; State budgets; Tax code; Income diversity
Twenty-three states have enacted tax credits for low- and moderate-income working families based on the federal Earned Income Tax Credit. A number of additional states are considering enacting EITCs in the 2008 legislative session. The following provides guidelines that policymakers and others can use to estimate the cost of a refundable state Earned Income Tax Credit that is set at a percentage of the federal credit. The estimating procedure is a simple three-step process.