Children in families who have accessed the EITC and move out of poverty are more likely to perform better in school, receive more schooling later in life, work more hours, and have higher future earnings.
Last year, Montana took a significant step in further helping these working families, by creating a state EITC that will become effective in the 2019 tax year. Montana matched eligibility for the state credit to the federal, which will provide over 80,000 Montana families with additional support.
During this past legislative session, legislators heard from hundreds of working families who shared their stories of how the federal EITC has been an effective tool to helping workers pay for day-to-day family expenses, including paying for children’s school clothing, fixing a vehicle needed to get to work, pay off or advance-pay utility bills, and save for future expenses. We heard from a working grandmother raising her granddaughter that uses her federal credit to help pay for school activities and clothing. We heard from a survivor of domestic violence who used the EITC to help make ends meet as a newly single mom. We heard from a number of former EITC recipients that accessed the credit to get through a difficult time and that are now earning enough to now longer be eligible.
The federal EITC has been a critical investment for the over 80,000 working families that have received the credit. Many more may be eligible but are not currently claiming the EITC. It’s important for families to see if they are eligible. To find out more info, check out the IRS’s EITC Assistant estimator, or more information here.
MBPC is a nonprofit organization focused on providing credible and timely research and analysis on budget, tax, and economic issues that impact low- and moderate-income Montana families.