Children whose parents receive the federal Earned Income Tax Credit (EITC) do better in school and are more likely to attend college and to earn more as adults, according to a new report from the Center on Budget and Policy Priorities.
The Child Tax Credit (CTC), a related credit that helps with the costs of raising children, also plays a major role in supporting working families as they strive to reach the middle class.
In Louisiana, an estimated 550,000 households benefited from these credits in 2010 – and the income boost they provided helped lift 126,000 people out of poverty, including 69,000 children.
Children from families that receive the federal tax credits are more likely to attend college, which means they will earn more as adults, according to the report.
The report comes as the Louisiana Legislature is considering plans to cut income taxes, which would disproportionately help the wealthiest in our state. Instead of giving tax breaks to those at the top, the Legislature should be working to expand Louisiana’s Earned Income Tax Credit, which currently is the lowest in the country among the states that have such a credit.
The Center on Budget and Policy Priorities’ full report, Earned Income Tax Credit Promotes Work, Encourages Children’s Success at School, Research Finds can be found here.
A related report by the Louisiana Budget Project about the state EITC can be found by clicking here.