The state EITC put $59 million into the pockets of working families in 2008.
RALEIGH (Oct. 12, 2010) – The Earned Income Tax Credit is a powerful anti-poverty tool that new data suggests has helped hundreds of thousands of North Carolinians stay afloat in trying economic times.
More than 800,000 North Carolinians claimed the state EITC in tax year 2008 -- just as the Great Recession began. A new study from the NC Justice Center’s Budget & Tax Center shows that this progressive tax policy infused local economies with tens of millions of dollars.
“The Earned Income Tax Credit helps low-income working families meet their basic needs,” said Alexandra Forter Sirota, a BTC policy analyst and the report’s author, “but it also stimulates local economies throughout North Carolina because these dollars are likely to be spent quickly and close to home.”
The state EITC was worth 3.5 percent of the federal EITC to a family claiming the credit in 2008. In that year, the state EITC put $59 million into the pockets of low-income working families, and it boosted the total combined value of the state and federal credits to $1.8 billion.
The tax credit works by boosting income and promoting work because only those who earned income—wages, salaries, net earnings from self-employment and certain benefits received before retirement—can claim it.
Outreach is important, Sirota said, to ensure all North Carolinians who are eligible claim the state EITC. Evidence from the Internal Revenue Service suggests that an additional 60,000 North Carolinians could have been eligible for the state EITC in 2008 because they received the federal EITC.
“Many more North Carolinians could have benefited from the credit,” she said. “If these households received the average state EITC, an additional $4.3 million would be circulating in their communities, stimulating the economy further.”
FOR MORE INFORMATION, CONTACT: Alexandra Forter Sirota, 919.861.1468, email@example.com; Jeff Shaw, director of communications, 503.551.3615, firstname.lastname@example.org.