Little Change in N.D. Tax Filers Receiving Federal Earned Income Tax Credit

The federal Earned Income Tax Credit (EITC) is an antipoverty program for working individuals and families that reduces the amount of taxes owed and also may provide a refund.

This month’s “Population Bulletin,” a monthly publication from the North Dakota State Data Center at North Dakota State University, focuses on the EITC data released from The Brookings Institution’s Metropolitan Policy Program.

In 2007, 12 percent of all North Dakota tax filers claimed the EITC, a proportion that is down slightly from 12.8 percent in 2006.

“The EITC program is one that has demonstrated its value in assisting low-income workers while also providing a boost to local economies,” says Richard Rathge, State Data Center director. “We need to continue to increase the awareness among those who are eligible for the program.”

Nationwide, 15.9 percent of tax filers claimed the EITC in 2007, which is down from 16.6 percent in 2006. The average credit that EITC filers received in 2007 was $1,979 nationally, compared with $1,932 in 2006.

Depending on income and family structure, tax filers may claim an EITC that could range in value from $1 to $4,400. In 2007, the average credit that North Dakota EITC filers received was $1,747, which was up 2.5 percent from $1,705 in 2006.

For most taxpayers who claim the EITC and receive a tax refund, the EITC is the largest portion of those refunds. Taxpayers may claim other credits, such as the Child Care Tax Credit, Child and Dependent Care Tax Credit and Educational Credits, that add to their refunds.

In 2007, 60.4 percent of refunds received by North Dakota taxpayers claiming credits (including EITC) were EITC dollars. This proportion is down from 72.8 percent in 2000.

Of North Dakota tax filers claiming the EITC in 2007, 27 percent also claimed the Child Tax Credit. Those North Dakota families receiving the Child Tax Credit received, on average, a child tax credit of $627.

NDSU Agriculture Communication