Policy Matters’ fact sheets and maps show how the federal earned income tax credit helps Ohioans
Posted January 29, 2021 in Press Releases
Organization marks 15th EITC Awareness Day
Today marks the 15th annual Earned Income Tax Credit (EITC) Awareness Day. Organized by the IRS, advocates, officials and service providers across the country are making sure that working people who are paid low wages know about the credit, and how it helps them support their families.
To mark the occasion, Policy Matters is releasing two statewide maps and two sets of fact sheets showing the number of Ohioans who receive the federal EITC in each state senate and house district. Ohio policymakers could do more to support working Ohioans who receive the federal and state EITCs by making Ohio’s credit refundable.
The EITC gives many working people who are paid low wages an income boost when they file their taxes. There are 29 states including Puerto Rico and the District of Columbia with state EITCs. The Ohio EITC is based on the federal credit, which in 2016 lifted 265,000 Ohioans out of poverty. Last year, 895,000 Ohioans claimed $2.2 billion in federal EITCs. Research shows that children from families that receive refundable EITCs have higher birth weights, better test scores, are more likely to attend college and earn more as adult workers.
“Ohioans who are paid low wages have been doing essential work to support our communities during the COVID-19 pandemic — like keeping grocery store shelves stocked, caring for our elderly family members, keeping our offices safe and clean,” said Policy Matters Project Director Kalitha Williams. “State policymakers should give them the support they need and deserve by strengthening the state earned income tax credit.”
State policymakers implemented Ohio’s EITC in 2013 and expanded it twice. Because they didn’t make the credit refundable, it does little to help working Ohioans who are paid the least. The latest expansion in the 2019-2020 Transportation Budget increased the credit from 10% to 30% of the federal EITC. The change helps some middle-income families, but it only benefits an additional 1% of workers with annual incomes of $22,000 or less.
Policy Matters included strengthening the Ohio EITC credit in our proposal to rebalance the state tax code. For years, certain policymakers have chosen to lavish the wealthiest Ohioans and corporations with tax cuts and tax breaks, while passing policies that result in people with low incomes paying a higher share of their income in state and local taxes. Policy Matters recommends Ohio’s lawmakers allow families to claim either the current state EITC, which is 30% of the federal credit, or a new option, set at 10% of the federal EITC, but would be fully refundable. Ohio is just one of six states that have an EITC that isn’t refundable.
“Every Ohioan, no matter what they look like or what job they do deserves to be able to support themselves and their families,” Williams said. “Refundability gives the EITC poverty-fighting power. Our lawmakers should make the credit work for more hard-working Ohioans.”