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State Tax Credits and “Making Work Pay” in Post‐Welfare Reform Era
Author(s) -
Beamer Glenn
Publication year - 2005
Publication title -
review of policy research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.832
H-Index - 45
eISSN - 1541-1338
pISSN - 1541-132X
DOI - 10.1111/j.1541-1338.2005.00142.x
Subject(s) - earned income tax credit , tax credit , incentive , state income tax , work (physics) , economics , welfare reform , public economics , tax reform , state (computer science) , tax deduction , welfare , government (linguistics) , business , labour economics , gross income , market economy , mechanical engineering , linguistics , philosophy , algorithm , computer science , engineering
This article outlines the work incentives and income support provided by the federal Earned Income Tax Credit (EITC) and illustrates how state earned income and dependent care credits assist working poor families. State earned income and dependent care tax credits serve as critical complements to the EITC, the federal government's largest antipoverty program. By attending to specific components of each tax credit, state policymakers can maximize state funds that qualify for federal maintenance of effort requirements under the Personal Responsibility and Work Opportunity Reconciliation Act (PROWRA), and they can reinforce positive effects and offset work disincentives stemming from current federal tax parameters.