UNH Research Finds State EITC Programs Provide Relief to Families in Need

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Tuesday, February 28, 2017

DURHAM, N.H. – Individuals in states with state Earned Income Tax Credit (EITC) programs receive, on average, a 17.6 percent match of their federal EITC benefits and that supplement pulls an estimated 0.3 percent of people out of poverty, according to new research reported by the Carsey School of Public Policy at the University of New Hampshire. As of 2015, 26 states and the District of Columbia provide state EITC benefits.

According to the researchers, even those who remain poor after receiving state EITC benefits get an average boost in their total family earnings of $455.

Arizona, Arkansas, Georgia, Nevada and Texas would experience the greatest reductions in child poverty rates if they adopted a state EITC. For example, Arizona’s child poverty rate would have been about 20.2 percent in 2010-14 rather than 22 percent if a 30 percent federal match had been adopted.

“Given the relatively low administrative costs associated with EITC programs compared to other anti-poverty programs as well as the fact that few states currently support EITC, a substantial expansion in the scale and scope of current EITC programs could have a significant impact on many low-income families in the U.S.,” the researchers said.

Because the EITC is unique in that it requires work and is offered as a once-a-year lump sum it functions differently than other safety net programs. “The EITC program can incentivize work among low-income households and payments are often used in novel ways such as bill payment and debt reduction. The EITC is an important complement to other anti-poverty programs,” the researchers said.

The Carsey report can be found here: https://carsey.unh.edu/publication/eitc-relief.

The research was conducted by Douglas Gagnon, a vulnerable families research associate at the Carsey School and a PhD recipient in education; Beth Mattingly, director of research on vulnerable families at the Carsey School and a research assistant professor of sociology; and Andrew Schaefer, a vulnerable families research scientist at the Carsey School and a doctoral candidate in sociology.

The Carsey School of Public Policy conducts research, leadership development, and engaged scholarship relevant to public policy. They address pressing challenges, striving for innovative, responsive, and equitable solutions at all levels of government and in the for-profit and nonprofit sectors.

The University of New Hampshire is a flagship research university that inspires innovation and transforms lives in our state, nation and world. More than 16,000 students from all 50 states and 71 countries engage with an award-winning faculty in top ranked programs in business, engineering, law, liberal arts and the sciences across more than 200 programs of study. UNH’s research portfolio includes partnerships with NASA, NOAA, NSF and NIH, receiving more than $100 million in competitive external funding every year to further explore and define the frontiers of land, sea and space.