Earned Income Tax Credit (EITC) by State: How Much Do Low-Income Workers Actually Receive in Refunds?

The Earned Income Tax Credit (EITC) represents one of the most significant anti-poverty tools in the United States federal tax code. By providing a refundable credit to low- and moderate-income working individuals and couples, the EITC effectively increases the after-tax income of millions of families. Beyond the federal level, a growing number of states and local governments have implemented their own versions of the EITC, often acting as a percentage match to the federal credit, creating a tiered system of financial support that varies drastically depending on a worker’s zip code.

Key Numbers

• Total Federal EITC Recipients (2024): Approximately 24 million workers and families
• Total Federal EITC Outlay (2024): ~$69.6 billion
• National Average EITC Amount (2024): $2,894
• State Adoption Rate: 31 states, the District of Columbia, and Puerto Rico
• Highest State Match: District of Columbia (increasing to 100% in 2026)
• Poverty Impact: Estimated 6.8 million people lifted out of poverty in 2024 (combined with CTC)

Explanation

The Earned Income Tax Credit is a refundable tax credit, meaning that if the credit amount exceeds the total taxes a person owes, the excess is paid back to the taxpayer as a refund. Unlike non-refundable credits, which can only bring a tax bill down to zero, the EITC provides actual cash in hand to eligible workers. This mechanism is designed to incentivize labor force participation by supplementing the wages of those in the lowest income brackets.

While the federal EITC sets the baseline, state-level EITCs are typically designed as “piggyback” credits. Most states calculate their credit as a specific percentage of the federal EITC amount. For example, a state with a 40% match would provide an additional refund equal to 40% of whatever the taxpayer received from the IRS. However, the impact of these state credits is often limited by refundability; some states only allow the credit to offset state income tax liability, meaning workers who owe no state tax receive no benefit.

Definition

The Earned Income Tax Credit (EITC) is a joint federal and state effort to provide financial relief to low-income working individuals and couples, particularly those with qualifying and supporting children. To qualify, a taxpayer must have earned income from working and meet specific income thresholds based on their filing status and number of children. The credit is structured to phase in as income rises, reach a maximum plateau, and then phase out as income continues to increase, ensuring the benefit is targeted at those most in need.

State Comparison

There is a stark divide in how states approach the EITC. Some states provide aggressive matches to maximize the impact on poverty, while others offer modest credits or non-refundable versions that benefit fewer people. The following table illustrates the diversity in state-level percentages and refundability based on IRS data.

Ranking Table

Based on 2024 tax year data processed in 2025, the volume and average value of federal EITC claims vary by state, reflecting both the population size and the concentration of low-income workers in those regions.

Why It Matters

The EITC is widely regarded by economists as one of the most effective tools for reducing poverty because it specifically targets the “working poor.” By providing a significant lump-sum payment annually, it allows families to cover major expenses—such as car repairs, medical bills, or security deposits—that are difficult to manage on a weekly or monthly paycheck. Furthermore, because it is tied to earned income, it encourages unemployed individuals to enter the workforce.

The EITC, along with the federal Child Tax Credit, lifted an estimated 6.8 million people out of poverty in 2024.

Factors Behind the Trend

The trend toward expanding state EITCs is driven by a growing recognition of the “cliff effect,” where small increases in income lead to a total loss of public benefits. State credits help smooth this transition. Recent legislative trends show a push toward full refundability. For instance, Pennsylvania recently passed a 10% refundable EITC to ensure that the lowest-earning workers—who often have zero tax liability—can actually access the funds. Similarly, the District of Columbia is moving toward a 100% match to create a more robust safety net for its urban workforce.

Largest States

In terms of sheer volume, California and Florida dominate the EITC landscape. California processed 2.5 million claims totaling $6.7 billion, while Florida processed 2.2 million claims totaling $6.2 billion. These numbers reflect the large populations of service-sector and agricultural workers in these states. However, while these states have the most recipients, the average refund is not necessarily the highest, as the average is influenced by the number of qualifying children per household across the state’s claimant population.

Smallest States

Smaller states or those with different economic profiles show significantly lower claim volumes. For example, Alaska reported 37.8 thousand claims with a total amount of $95.1 million. Despite the lower volume, the average EITC amount in Alaska ($2,519) remains competitive with national averages, suggesting that the demographic of claimants in smaller states mirrors the national profile of low-income working families.

Methodology

The data for federal EITC claims is aggregated by the Internal Revenue Service (IRS) based on processed tax returns. The figures represent the number of claims, the total dollar amount distributed, and the calculated average per claim. State-level percentage data is compiled from state tax department guidelines and IRS summaries. It is important to note that “processed” data refers to the date the IRS completed the return, which may differ slightly from the actual tax year the income was earned.

Source & Data Date

The primary data sources for this analysis are the Internal Revenue Service (IRS), specifically the “Statistics for tax returns with the Earned Income Tax Credit” and the “States and local governments with Earned Income Tax Credit” lists. Additional policy context is provided by the Institute on Taxation and Economic Policy (ITEP). The federal statistics reflect the 2024 tax year processed in 2025 (as of December 2025), and state policy updates are current as of September 2025 and February 2026.