Many low- and moderate-income families will claim the earned income tax credit this tax season—and all Americans will reap the benefits. In the recent fiscal showdown deal, Congress voted to continue the 2009 expansions of the earned income tax credit, which also acknowledged the increased costs to families raising three or more children and corrected the “marriage penalty,” by which some married couples risked losing a portion of their earned income tax credit for the five years following their union.
Not only does the earned income tax credit keep millions of working families from slipping into poverty each year, it also leads to positive outcomes for family health and student education. Earned income tax credit dollars benefit our economy, and most families who receive the credit end up paying billions of dollars more in net federal income tax than they receive in the earned income tax credit over time. With the 2012 tax season kicking off next week and today being Earned Income Tax Credit Awareness Day, now is the time to get the facts on one of the most important tax credits helping to ensure that work pays for working families.
Katie Wright is a Research Associate at the Center for American Progress.