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Open Access Publications from the University of California

The Earned Income Tax Credit: a key policy to support families facing wage stagnation


The Earned Income Tax Credit (EITC) has been supporting the incomes of low-income working families since 1975. It is now a major anti-poverty program for both adults and children. This brief provides an overview of how the Earned Income Tax Credit supports families in a context of wage stagnation and encourages work. Together with the Child Tax Credit, the EITC lifted 9.2 million people, including 4.8 million children, out of poverty in 2015. It has long-lasting benefits on maternal and children’s health and on children’s development. The EITC has therefore positive effects beyond its direct cash value to recipients.

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