The Earned Income Tax Credit
Almost 45,000 Vermont families, with nearly 50,000 children, qualified for the state’s Earned Income Tax Credit (EITC) in 2011, according to the most recent statistics. Like the federal EITC, the Vermont credit is designed to help low-wage workers. National studies have shown the EITC to be one of the most effective anti-poverty programs.
The amount of the credit depends on the amount of earned income—either from wages or self-employment—and the number of children the taxpayer has. Individuals or families without children also can qualify for the credit, but they made up only about a third of the Vermont recipients and received only 5 percent of the total Vermont credits in 2011. The credit is refundable: If it’s more than a family’s income tax liability, the difference is paid out as a tax refund. Vermont’s credit, which the Legislature created in 1988, is currently equal to 32 percent of the federal credit.
The maximum Vermont EITC was $1,840 in 2011, which was for a family with three children and income from $12,750 to $21,800. The maximum income to qualify for the EITC was just under $50,000 for a family with three children. However, at that income level, the Vermont credit was less than $10.
In 2011, Vermonters qualified for $26 million in state earned income credits, an increase of $5.5 million from before the recession. Part of the increase was the result of federal changes that allowed families with children to qualify for larger credits. Some recipients’ credits also increased as their incomes declined; and more Vermonters qualified for the credit during the recession.
For each town, the map shows the number of EITC recipients in 2011; the percent change from the number of recipients in 2007, before the recession; and the amount of the average state credit in 2011. Statewide figures are in the table below.
Data source: Vermont Department of Taxes
