One in 8 N.D. Tax Filers Received Earned Income Tax Credit

In 2008 (latest figures available), 12.5 percent of all North Dakota tax filers claimed the federal earned income tax credit (EITC), a proportion that was relatively unchanged from 12 percent in 2007.

The EITC is an anti-poverty program for working individuals and families. The EITC 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.

“The relatively unchanged proportion of North Dakotans claiming EITC reflects a relatively stable distribution of low-income wage earning families in the state,” says Richard Rathge, State Data Center director. “In comparison with the U.S., which is recovering from a deep recession, this is good news for North Dakota.”

Nationwide, 17.3 percent of tax filers claimed the EITC in 2008, which is up from 15.9 percent in 2007.

Depending on income and family structure, tax filers may claim an EITC, which can range in value from $1 to $5,751. In 2008, the average EITC credit that North Dakota filers received was $1,814, which was up 3.8 percent from $1,747 in 2007. Nationwide, the average credit that EITC filers received in 2008 was $2,047, which was up 3.4 percent from $1,979 in 2007.

For most taxpayers who claim the EITC and receive a tax refund, EITC dollars make up the largest portion of those refunds. In 2008, 55.2 percent of refunds received by North Dakota taxpayers claiming the EITC were composed of EITC dollars. This proportion is down from 72.8 percent in 2000.

Of North Dakota tax filers claiming the EITC in 2008, 28 percent also claimed the child tax credit. Those North Dakota families receiving the child tax credit received, on average, $646.

NDSU Agriculture Communication - Dec. 6, 2011