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March 25, 2019

A Refundable EITC Helps Working Families in Every District: Spring 2019 Update

Over 600,000 of Virginia’s working families currently receive the federal Earned Income Tax Credit (EITC). For families struggling to make ends meet, these tax credits make a difference in terms of putting food on the table, affording child care, and staying current on utility bills. The federal EITC is one of the biggest success stories we have.

Twenty-nine states and the District of Columbia have enacted their own state EITCs to supplement the federal credit. Virginia’s state EITC began in 2006 and is available to working people who claim the federal EITC on their tax returns, equaling 20 percent of the value of the federal EITC. Like the federal credit, Virginia’s credit rewards and encourages work, gives a boost to families, and improves the long-term prospects for children.

Infographic showing the amount of credit earned by a two parent family and the portion they would actually receive

However, Virginia’s version of the credit is different from the federal version and the EITCs in 23 other states and DC. Because the state puts overly tight limits on how much of the credit a family can claim, Virginia’s EITC does not allow all 600,000 families to receive the full value of the credit they’ve earned. This structure of Virginia’s state EITC leaves over $200 million in help on the table each year. That’s money that would give working people a wage boost at a time when wages are stagnant.

During the 2020 legislative session, Virginia lawmakers have an opportunity to help Virginia’s working families by expanding the state EITC by making it refundable.

Or click through to see the latest numbers of families who receive the EITC in each state Senate and House district (reflecting the final federal court ordered redistricting map), as well as in each locality.

Chris Wodicka

Michael Cassidy

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