State Income Taxes and Credits
Most states levy state income taxes, but the tax burden on low-income families varies significantly depending on where they live. A growing number of states offset this burden with state earned income tax credits and/or state child and dependent care tax credits. These credits are typically based on provisions in the federal income tax code, but states make all decisions regarding eligibility and benefit levels. [More detail...]
Federal decisions are italicized.
Income Tax Liability
Tax threshold
| Income tax threshold for single-parent family of 31 | $25,500/year (2007) |
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| Income tax threshold for two-parent family of 41 | $32,000/year (2007) |
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Tax burden
| Income tax burden for single-parent family of 3 at 100% FPL1 | $0/year (2007) |
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| Income tax burden for two-parent family of 4 at 100% FPL1 | $0/year (2007) |
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State Earned Income Tax Credit (EITC)
Income eligibility criteria
| Income eligibility rules same as federal EITC2 | No state credit (2009) |
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| Income limit for 1-parent family with 2 qualifying children2 | No state credit (2009) |
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Benefit level
| Refundable credit available2 | No state credit (2009) |
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| Percent of federal EITC2 | No state credit (2009) |
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| Max benefit for family with 2 qualifying children2 | No state credit (2009) |
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State Child and Dependent Care Tax Credit
Income eligibility criteria
| Income eligibility rules same as for federal credit3 | No state credit (2008) |
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| Income limit for family with 2 or more qualifying children3 | No state credit (2008) |
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Eligible expenses
| Child care expenses eligible by same rules as federal credit4 | No state credit (2008) |
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Benefit level
| Refundable credit available3 | No state credit (2008) |
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| Benefit structure3 | No state credit (2008) |
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| Max benefit for family with 2 qualifying children3 | No state credit (2008) |
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Data Notes and Sources
Data on State Income Taxes and Credits were compiled by NCCP in June 2009. Some state policy decisions may have changed since these data were collected.
- Calculations include income tax credits that are available to all low-income families in the state, such as state earned income tax credits.
Jason A. Levitis and Andrew C. Nicholas, The Impact of State Income Taxes on Low-Income Families in 2007, Center on Budget and Policy Priorities, 2008. Available at: http://www.cbpp.org (Accessed March 19, 2009).
- State EITC Online Resource Center, http://www.stateeitc.com (accessed June 3, 2009); with additional information from NCCP.
- Nancy Duff Campbell, Joan Entmacher, Amy K. Matsui, Cristina Martin Firvida, and Christie Love. 2006. Making Care Less Taxing: Improving State Child and Dependent Care Tax Provisions, with updates from National Women's Law Center, 2009 Supplement to Making Care Less Taxing. Washington, DC: National Women's Law Center.
- These include care expenses for children under 13 years that allowed the claimant to work or look for work, up to a maximum of $3,000 per year for one child and $6,000 per year for two or more children. Claimed expenses may not exceed claimant's earnings, or, in two-parent families, the earnings of the lesser-earning parent; full-time students are treated as having $250 per month in earned income (or $500 per month in families with two or more children).
Nancy Duff Campbell, Joan Entmacher, Amy K. Matsui, Cristina Martin Firvida, and Christie Love. 2006. Making Care Less Taxing: Improving State Child and Dependent Care Tax Provisions, with updates from National Women's Law Center, 2009 Supplement to Making Care Less Taxing. Washington, DC: National Women's Law Center.
