What States Offer the Earned Income Credit?

The Earned Income Tax Credit (EITC) is a valuable financial break for many working families in the United States.

It’s designed to assist low to moderate-income workers by reducing the amount of tax owed and potentially increasing a refund.

But did you know that some states offer their own versions of the EITC in addition to the federal credit?

In this article, we’ll explore which states provide their own earned income credits and how you can determine your eligibility for these beneficial programs. Understanding these credits can significantly impact your financial planning and tax management, making it essential knowledge for taxpayers in eligible states.

Before diving into the specific states that offer the EITC, let’s quickly recap what the Earned Income Tax Credit is all about. At its core, the EITC is a tax benefit for low to moderate-income workers, particularly those with children. It aims to reduce poverty and encourage work by supplementing income.

The amount of the credit varies based on several factors, including income level, filing status, and the number of qualifying children. The more children you have, the higher the potential credit. Importantly, the EITC is refundable, meaning that it can result in a refund if it exceeds the total taxes owed.

While the federal EITC is well-known, many states have taken the initiative to provide an additional layer of financial support by offering their own earned income credits. These state credits are typically calculated as a percentage of the federal EITC, providing extra benefits to eligible taxpayers.

• California: The California Earned Income Tax Credit (CalEITC) can be claimed up to $3,644 for qualifying taxpayers earning up to $31,950 per year.
• Colorado: Colorado offers a state EITC equal to 10% of the federal credit, providing additional relief to qualifying residents.
• Connecticut: The Connecticut Earned Income Tax Credit (EITC) has been increased to 40%, up from 30.5%.
• Delaware: Delaware’s EITC is offered at 20% of the federal credit.
• District of Columbia: For tax year 2025, the DC EITC is 70% of the federal EITC.
• Hawaii: The Hawaii Earned Income Tax Credit (EITC) provides significant tax relief for low to moderate-income taxpayers, allowing them to claim 40% of their federal EITC amount.
• Illinois: Residents of Illinois can benefit from a state EITC equal to 18% of the federal credit.
• Indiana: The Indiana EITC is 10% of the federal credit, which is fully refundable if the credit exceeds your state tax liability.
• Iowa: Taxpayers who are eligible for the EITC at the federal level are eligible for an Iowa EITC equal to 15% of the federal credit amount.
• Kansas: The Kansas EITC is 17% of the federal EITC amount claimed on your federal tax return.
• Louisiana: The Louisiana Earned Income Tax Credit (EITC) is a fully-refundable credit that is 5% of the federal credit.
• Maine: The Maine EIC is equal to 25% of the federal EIC for most taxpayers, and 50% for those with no qualifying children.
• Maryland: Maryland has a unique approach, offering both a refundable and non-refundable EITC option. The refundable
• Massachusetts: Massachusetts offers a state EITC equal to 30% of the federal EITC.
• Minnesota: Minnesota’s Working Family Credit is similar to the EITC and is designed to assist low-income working families.
• Montana: In 2025, Montana will raise its state EITC to 10% of the federal credit, benefiting many families.
• Nebraska: The credit is available to all Nebraska taxpayers who qualify for the federal credit, and it is set at 10% of the federal credit
• New Jersey: New Jersey’s EITC is set at 40% of the federal EITC, offering substantial additional support to eligible families. The credit is worth 28% of the federal credit.
• New Mexico: The state EITC is modeled after the federal credit, offering 10% of the federal credit and is fully refundable, meaning any portion that exceeds your tax liability can be refunded to you.
• New York: New York provides a state EITC that is 30% of the federal EITC. This additional credit can be a valuable boost for residents.
• New York City: The credit is generally equal to 30% of your allowable federal EITC, reduced by the amount of any household credit
• Ohio: The maximum credit amount is 30% of the federal credit, which is $1,400 for one qualifying child and $2,100 for two or more qualifying children.
• Oklahoma: The Oklahoma Earned Income Tax Credit (EITC) is set at 5% of the federal EITC amount.
• Oregon: Oregon’s state EITC is 9% of the federal credit, with a higher percentage for families with young children.
• Rhode Island: The Earned Income Tax Credit (EITC) in Rhode Island is set at 16% of the federal credit.
• South Carolina: In South Carolina, the Earned Income Tax Credit (EITC) has been set at 125% of the federal EITC.
• Vermont: Vermont provides a state EITC that is 36% of the federal credit.
• Virginia: In Virginia, the Earned Income Tax Credit (EITC) for 2025 will be 20% of the federal EITC amount, up from the previous rate of 15%. This credit is refundable.
• Washington, D.C.: The district offers a state EITC that is 40% of the federal EITC, significantly benefiting its residents.

Eligibility for the EITC can vary depending on your income, filing status, and the number of qualifying children. Here’s a simplified checklist to help you determine if you might qualify:

• Income Limits: Your income must fall below a certain threshold, which varies based on your filing status and number of children. For instance, a single filer with no children can earn up to about $15,000, while a married couple with three or more children can earn around $57,000.
• Filing Status: You must file as single, married filing jointly, head of household, or qualifying widow(er). Married individuals filing separately are not eligible.
• Qualifying Children: Having qualifying children can significantly increase your credit amount. These children must meet specific criteria related to age, relationship, and residency.
• Investment Income: Your investment income must be $3,650 or less for the year.
• Social Security Number: You, your spouse, and any qualifying children must have valid Social Security numbers.
• U.S. Citizenship or Resident Alien Status: You must be a U.S. citizen or a resident alien for the entire year.

Claiming the State Earned Income Tax Credit

To claim the EITC, you’ll need to file a tax return, even if you owe no tax or aren’t required to file. Use IRS Form 1040 and attach Schedule EIC if you have qualifying children. Many states with their own EITC programs use the federal EITC as a basis, so claiming the federal credit often automatically qualifies you for the state credit.

TurboTax is a popular tax preparation software that can help you determine your eligibility for both federal and state earned income credits. It simplifies the filing process by automatically calculating your credit based on the information you provide, ensuring you don’t miss out on any potential refunds.

• File Early: The sooner you file your tax return, the sooner you’ll receive your refund if you’re eligible for the EITC.
• Double-Check Your Information: Ensure all your details, including Social Security numbers and income figures, are accurate to avoid processing delays.
• Use Free Tax Help: Take advantage of free tax preparation services provided by the IRS or local community organizations to ensure you’re claiming all the credits you’re entitled to.
• Keep Updated: Tax laws can change, so stay informed about any updates to EITC eligibility or amounts.

The Earned Income Tax Credit is a powerful tool for supporting working families across the United States. With both federal and state-level credits available, eligible taxpayers can significantly reduce their tax burden and potentially receive a substantial refund.

By understanding which states offer their own EITC programs and determining your eligibility, you can make informed decisions that positively impact your financial well-being.

Whether you’re a financial planning enthusiast or someone simply looking to maximize your tax refund, knowing about the EITC and its state counterparts is a step towards better financial health. Always consider consulting a tax professional if you have specific questions or need personalized advice.

Efficient tax software like TurboTax Online can simplify the process, guiding you through each step to maximize your credits. These tools can help you identify the most lucrative benefits available to you.