RS22316
The Earned Income Tax Credit (EITC)
November 21, 2006
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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 2004, total EITC (EITC applied against tax liability and refunded EITC) was $40.7 billion, with 22.4 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 35.8% of the total EITC amount. States with a higher percentage of federal tax returns claiming the EITC were located in the South, with Mississippi (32.1%) and Louisiana (28.9%) having the highest percentage of federal tax returns claiming the EITC.
