First enacted in 1975 and made permanent in 1978, the Earned Income Tax Credit (EITC) is now the largest federal anti-poverty cash program. As an example of the program’s reach to low-income working families, in fiscal year 2006 the EITC served 23.1 million filers who received a total of $44.7 billion – versus the Temporary Assistance for Needy Families (TANF) program that served 1.8 million families in the same year and dispersed $9.1 billion.
The EITC is a refundable tax credit (meaning an individual need not owe any taxes to receive the benefits) available to eligible workers who earn relatively low wages. Eligibility is based on income, age, residence, and number of qualifying children. The credit phases in at the lowest income level for single workers and increases with the number of eligible children in a worker’s family before phasing out again at the higher income threshold. 2009 saw important changes to this wage supplement with the creation of a new credit category for families with children. First Focus is committed to the preservation of these improvements to the EITC.
