State-Level Tax Credits Can Help Improve Children’s Well-Being

By Devin Simpson

States working to improve the lives of children should consider adopting or strengthening state-level tax credits for low-income workers, according to a new report.

The Annie E. Casey Foundation’s annual KIDS COUNT data book ranks the well-being of children across all 50 states. The report analyzes children’s lives across four areas: economic well-being, education, health, and family and community, and offers policy solutions to help states provide a brighter future for their youngest residents. This year’s 30th-edition report also analyzes child population growth and trends over the last 30 years.

The report highlights the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) as policy solutions for reducing child poverty by allowing parents to keep more of their income. The report emphasizes the importance of enacting these credits in states where child population growth has outpaced the national average. For example, the report shows that of the 15 states with high child population growth, 10 states also have extremely high rates of child poverty but do not have a state EITC.

According to the Center on Budget and Policy Priorities, the EITC and CTC lifted 4.8 million children out of poverty and made 7.7 million children less poor in 2017. Research has linked the EITC to improved health outcomes for children, improved academic performance and higher college enrollment rates.

To learn more about state-level EITCs and CTCs across the country, visit our website.