New Report Lifts Up EITC as Effective Way to Keep Kids out of Poverty

By Kyle Parrott

This week, a new report lifted up the Earned Income Tax Credit (EITC) as one of the most dependable tools for improving the health of American children and keeping them out of poverty.

The KIDS COUNT Data Book, a report released annually by the Annie E. Casey Foundation, ranks all 50 states in several areas of child well-being and provides a snapshot of how lawmakers at the state and federal level are working to lower the child poverty rate.

The report identifies the EITC as one of the best policies federal and state governments can offer to encourage work while improving the lives of children in low- to middle-income families. The data shows that states with EITCs often score higher on an index of overall child well-being. For example, first-ranked Minnesota has a state-level EITC while last-ranked Mississippi does not.

The data book, which also recognized the importance of the EITC in last year’s report, joins other studies across academic fields that tout the benefits of tax credits for working families. The Brookings Institution estimates that without the EITC and the Child Tax Credit (CTC), the child poverty rate would have been 6.4 percent higher in 2013. The EITC has also been shown to improve educational attainment and even increase birth weights among children of recipients.