According to the US Internal Revenue Service, the Earned Income Tax Credit (EITC) is a refundable federal income tax credit for low-income working individuals and families. Thus, counties with higher percentages of tax filers receiving the EITC have higher percentages of low income individuals and families. The EITC was put in place by Congress in 1975 to offset the burden of social security taxes and to provide an incentive to work.
The amount of EITC received for individual tax returns varies by income and family structure. In 2010, the amount ranged from $457 for a childless single tax filer with income lower than $13,460, to $5,036 for families with more than one qualifying child. Unfortunately, about 20 percent of those eligible for the EITC do not claim it. The number of tax returns receiving the EITC and the average EITC credit received can vary widely from year to year.
For the 2010 tax year in Oregon:
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1,566,563 total tax returns were filed;
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17.0 percent of all tax returns received the EITC, compared to 16.0 percent nationally;
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the average credit for those claiming the EITC was $1,953, compared to $1,999 nationally;
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the total EITC received was $377,436,660.
In addition to the EITC, families can also claim other credits including the Child Tax Credit. Currently, this credit provides $1,000 per qualifying child for families with an annual income below $110,000. The Child Tax Credit is an important resource for many low-income families, even though it also benefits families with higher incomes.
For the 2010 tax year in Oregon:
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15.7 percent of all tax returns received the Child Tax Credit, compared to 16.8 percent nationally;
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the total Child Tax Credit received amounted to $355,615,758.