Working Paper: NBER ID: w27626
Authors: David Neumark; Katherine E. Williams
Abstract: In recent years, many states and some local governments implemented or expanded their own supplemental Earned Income Tax Credits (EITCs). The expansion of state EITCs may have stemmed in large part from wanting to provide a more generous program than the federal program, because state EITCs increase transfer payments to low-income recipients who qualify. However, state and local governments can also benefit from maximizing participation of their constituents in the federal EITC, and there are several reasons why state or local EITCs could increase participation in the federal EITC program. We find some evidence suggesting that state EITCs may increase federal EITC program participation among low-skilled single filers with children.
Keywords: Earned Income Tax Credit; EITC; Federal Tax Participation; State Tax Credits
JEL Codes: H24; H71
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| state EITCs (H73) | federal EITC participation (H26) |
| state EITC supplement (H79) | employment rate for single individuals with children (J12) |
| state EITCs (H73) | employment for single individuals with children (J12) |
| state EITCs (H73) | federal EITC participation among single filers with one child (H31) |
| state EITCs (H73) | federal EITC participation among low-skilled individuals (H31) |
| state EITCs (H73) | employment for married individuals (J12) |
| state EITCs (H73) | federal EITC participation among individuals with two or more children (H31) |
| EITC participation (H26) | increased information and outreach about the EITC (H26) |