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Policy Points from Iowa Fiscal Partners

Posts tagged Brookings Institution

How the EITC Hits Home

Across the state, the EITC benefits a significant share of households

How the EITC Hits Home

1 in 7 Iowa Households Value Working Family Credit; $439 Million to Economy

Backgrounder, 2 pages (PDF)

Low- and moderate-income working families in Iowa are benefiting in 2014 from an expansion of the state’s Earned Income Tax Credit, passed last year. Using an analysis from the Brookings Institution to illustrate where Iowans claim the credit, our map below breaks down the percentage of federal tax filers claiming the EITC in each Iowa House district. Brookings analysis (see table below) shows 15 percent of Iowa federal income tax filers in 2012 benefited from the credit — about 207,000 households.

Use of the Federal EITC, by Iowa State House District, 2012 Iowa EITC map 2012

Over 15 Percent of Iowans Filing for Federal EITC — by Iowa Senate and House Districts, 2012

EITC Table 2012 data

First Iowa Tax Day with expanded EITC

Posted April 30th, 2014 to Blog

Almost unnoticed as Iowans file their state income taxes today is that many thousands of families are benefiting from a newly expanded state Earned Income Tax Credit (EITC).

Iowa legislators last year passed and Governor Branstad signed an expansion of the working family credit, doubling it from 7 percent of the federal EITC to 14 percent for 2013, and bumping it to 15 percent for this year. The increase was barely mentioned by the Governor when he signed it as part of a larger package of tax changes. Yet, as we noted recently — the boost is “arguably the most important legislation he signed last year.”

arguably the most important legislation he signed last year: doubling the Earned Income Tax Credit. – See more at: http://www.iowafiscal.org/ifp-news-statement-on-governors-address/#sthash.NzN7o0IR.dpuf

New data from 2012, compiled by the Brookings Institution, sort out by legislative district the number and percentage of tax filers who benefit from the federal EITC, on which the state credit is based. We have put that information into a new Iowa Fiscal Partnership backgrounder; the two-pager is available here. In the map below, the golder and greener the district, the greater its constituents use the EITC. In the green areas, over 20 percent of filers use the EITC.

130506-EITCmap

Iowa’s Earned Income Tax Credit is an important tool in making work pay for low-income households. We have shown how a further expansion could better fill the gap between low-wage income and a basic-needs household budget, as well as improve Iowa’s tax treatment of low-wage families.

Owen-2013-57Posted by Mike Owen, Executive Director