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Report: Low-Income NC Workers Would Benefit from EITC

North Carolina is the only state in the nation to rescind its state Earned Income Tax Credit for low-income families. A new report suggests it's time to bring it back. (Adobe Stock)
North Carolina is the only state in the nation to rescind its state Earned Income Tax Credit for low-income families. A new report suggests it's time to bring it back. (Adobe Stock)
December 13, 2019

RALEIGH, N.C. - One in eight North Carolina workers earns poverty-level wages, and a new report says a state Earned Income Tax Credit could help these families pay for food, childcare and housing.

Eligible North Carolinians already receive an average of $2,500 a year in federal Earned Income Tax Credits. Heba Atwa, policy advocate at the Budget & Tax Center at the North Carolina Justice Center, points out that a state credit - set at 20% of the federal credit - would mean an extra $500 annually for working families.

"That's especially important in a state like North Carolina, where we have a high rate of working poverty," says Atwa. "So, it's important to note that the EITC, again, is for workers."

Twenty-nine states along with Puerto Rico and Washington, DC, all have implemented Earned Income Tax Credits. The report also notes nationwide, 60% of all EITC dollars are claimed by single mothers.

Atwa points out that North Carolina used to have a state EITC - but it was eliminated when lawmakers made significant changes to the tax system five years ago.

"North Carolina actually is the only state to have ever done away with the EITC," says Atwa. "We had a state-level EITC from 2008 until 2014."

Twenty-four percent of the state's households with children are considered low-income and working. Atwa says research shows even a slight income boost from a tax credit has been linked to measures like improved newborn birth weight and maternal health - in families where a little more economic security is a big plus.

"That can really be a win and a lifesaver for working families with children," says Atwa.

According to the report, these types of tax credits also have been correlated with a decrease in deaths by suicide.

Reporting by North Carolina News Connection in association with Media in the Public Interest and funded in part by the Park Foundation

Nadia Ramlagan, Public News Service - NC