Advocacy Spotlight: Supporting Ohio Families: Promoting a Refundable EITC

First, what is the Earned Income Tax Credit (EITC) and why should you care?
The Earned Income Tax Credit (EITC) is a refundable tax credit for low- to moderate-income working individuals and families. It is designed to encourage and reward work, as well as to reduce poverty. The amount of EITC benefit depends on a recipient’s income and number of children. Workers who qualify for the EITC and file a tax return can receive a refund even if they owe no tax. EITC began as a federal program in the 1970s and has been expanded under both Republican and Democratic administrations. It is widely recognized as the most impactful anti-poverty program in the United States.

You mentioned a federal program. So, what does a state program do?
Many states (including Ohio) have a state EITC benefit based on the federal EITC. Ohio’s current EITC is worth 30% of the federal benefit – but is nonrefundable. This means that if a family pays little or no state income tax, they do not receive the full benefit. Creating a refundable program would mean that families could receive the full tax credit, regardless of whether they pay state income tax. This change would directly support Ohio’s lowest-income families and put money back into the pockets of workers and their families.

Want to learn more? So do we! The Women’s Fund continues to explore the many benefits of this critical policy. Learn more about our Research & Advocacy