Working Papers

The Earned Income Tax Credit

“The Earned Income Tax Credit.” (updated September 2015). Forthcoming in Economics of Means-Tested Transfer Programs in the United States, Robert A. Moffitt, ed. Chicago: University of Chicago Press.

The Earned Income Tax Credit (EITC; sometimes referred to as the “Earned Income Credit,” or EIC) is in many ways the most important meansMtested transfer program in the United States. Introduced in 1975, it has grown to be one of the largest and least controversial elements of the U.S. welfare state, with 26.7 million recipients sharing $63 billion in total federal EITC expenditures in 2013. Moreover, the federal EITC is supplemented by the Child Tax Credit, which has a similar structure and is comparable in size (though more tilted toward higherMincome families), and by state and local EITCs in at least 25 states and several municipalities.