A growing number of families have received the earned income tax credit since its creation

A chart showing how the number of low income families that benefit from the earned income tax credit has increased in the past 20 years.

The earned income tax credit (EITC) was enacted in 1975 to reduce the burden of Social Security taxes on low-income workers and to encourage them to seek employment rather than welfare benefits. The amount of the credit depends upon the number of qualifying children in the household and the level of earned and adjusted gross income. Originally, the credit was limited to a maximum of $400 per year for a qualifying household, but subsequent legislation expanded the basic credit and provided larger credits for families with two or more children. In 2008, the EITC provided an estimated $51.5 billion to nearly 25 million low-income workers and their families, for an average of $2,063 per recipient. Since rural households have historically had higher poverty rates than urban households, rural taxpayers benefit disproportionately from programs targeting low-income workers, such as the EITC. This chart appeared in "Rural America Benefits from Expanded Use of the Federal Tax Code for Income Support" in the June 2011 issue of ERS's Amber Waves magazine.

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