Solves
Erica Williams et al 20, (former Vice President for State Fiscal Policy at CBPP), Samantha Waxman (Deputy Director of State Policy Research) and Julian Legendre (State Visual Communications Specialist with the State Fiscal Policy (SFP) team.). March 9. "States Can Adopt or Expand Earned Income Tax Credits to Build a Stronger Future Economy" https://www.cbpp.org/research/state-budget-and-tax/states-can-adopt-or-expand-earned-income-tax-credits-to-build-a //pipk
State EITCs Are Easy to Administer, Offer Good Value to States
State EITCs are easy for states to administer and for working families to claim. States incur virtually no costs for determining eligibility for the credit because, in most cases, families eligible for the federal credit also are eligible for the state credit. Since state credits typically are set at a fixed percentage of the federal credit, state revenue departments need only add one line to a state’s income tax form, and filers need only multiply their federal EITC by a specified rate to determine their state credit.
State EITCs also offer a good value to states. In states with an income tax and a refundable EITC, the EITC costs less than 2 percent of state tax revenues each year.[11] Because state EITCs are well targeted to low- and moderate-income working families, they cost less than many other tax cuts that states consider.[12] A credit of a few hundred dollars can make a big difference to many families without making a major dent in a state’s treasury.
Also, if a state raises a tax that hits low-income households hardest, like the sales tax or gas tax, it can help make low-income families whole again by setting aside part of the resulting revenue to adopt or expand an EITC.