REDUCED POVERTY’S IMPACT
The state EITC is a tax cut for working families to lessen impact of poverty and improve the health and well-being of low-wage families.
BOOST LOCAL ECONOMY
EITC households spend a large portion of their refund on basic needs, boosting the local economy.
The state EITC helps people keep working despite low wages, which benefits their family, their community, and the economy.
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Why is refundability crucial to the #OKEITC?
Refundability is critical to the success of the EITC because it allows the credit to still reward work and support families even if they pay little income tax. The state EITC was enacted in Oklahoma in 2000, and has enjoyed strong bipartisan support as a way to boost work and keep working families out of poverty.
In 2016, the state Legislature made the Oklahoma EITC non-refundable, so if the credit is more than what a family owes in income taxes the balance won’t be refunded to them. Two in three households that claim the EITC lost some or all of their credit. The average loss was $121 per family.
Across the state, more than 200,000 working families lost some or all of their credit because of this cut. Making the state EITC non-refundable means that it does far less to reduce poverty and encourage work, particularly among workers earning the least.
A married couple with 2 children making $24,600 lost $264
A single parent with 2 children making $10 per hour lost $231
A single parent with 1 child making minimum wage ($7.25) lost $169
Read more about the state EITC
For even more research on the state EITC, click here.
Restoring the Earned Income Tax Credit is a must this session
In Oklahoma’s tax code, there are multiple tax breaks for high-income individuals and businesses. But just three tax credits are targeted at low-income Oklahomans, and one of those – the Earned Income Tax Credit (EITC) – was slashed in 2016 to help balance the books during a severe budget crisis.
The conservative anti-poverty program
The federal EITC was originally proposed by the Nixon administration and expanded under Presidents Ronald Reagan, George W. Bush, and Bill Clinton. President Reagan called it “the best antipoverty, the best pro-family, the best job creation measure to come out of Congress.”
States can adopt or expand EITCs to build a stronger future economy
State EITCs build on the success of the federal credit by keeping people on the job & reducing hardship for working families. This important state support also extends the federal EITC’s well-documented long-term positive effects on children, boosting the nation’s future economic prospects.