Studies Show Earned Income Tax Credit Encourages Work and Success in School and Reduces Poverty

Some 27 million working adults with low and moderate incomes, most of whom are raising children, received the Earned Income Tax Credit (EITC) in 2009 to reduce their taxes and supplement their earnings. According to this analysis, studies have found that the EITC encourages work, reduces poverty, helps families meet basic needs, and improves children’s achievement in school and likely increases their earnings as adults. The Child Tax Credit (CTC), a related tax credit designed to help offset the cost of raising children, also plays a pivotal role in helping low-income families.