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The Earned Income Tax Credit (EITC): Percentage of Total Tax Returns and Credit Amount by State , Record No.: RS22316, Date: November 04, 2005 1 (November 4, 2005)

handle is hein.tera/crstax0403 and id is 1 raw text is: Order Code RS22316 November 4, 2005 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 2003, total EITC (EITC applied against tax liability and refunded EITC) was $39.2 billion, with 22.1 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 35.9% of the total EITC amount. States with a higher percentage of federal tax returns claiming the EITC were located in the South, with Mississippi (31.87%) and Louisiana (28.45%) 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 and EITC amount, accounting for 35.10% of all federal tax returns claiming the EITC and 35.9% of the total EITC amount in tax year 2003. Alternatively, the distribution can be shown using the Congressional Research Service Ae The Library of Congress A more detailed description of EITC eligibility and the calculation of the credit are in CRS Report RL3 1768, The Earned Income Tax Credit (EITC). An Overview, by Christine Scott.

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