At tax time, any way that one can put more money back into their own pocket is a welcome relief. The Earned Income Tax Credit (EITC), does just that for working families with low incomes. Based off the federal government’s version, the state of Massachusetts offers their own version of the credit for state residents. If a taxpayer was eligible to receive the federal credit, then they will likely qualify for the state EITC as well, since the state version follows the same rules for eligibility.

In Massachusetts, working families are offered a state EITC at 15% of the federal credit. The credit is also fully refundable, meaning that residents can claim a refund for the amount of the credit that exceeds their tax liability. A family with zero state income tax liability can receive the entire amount of the credit as a refund.

By offering the excess credit amount as a refund, taxpayers can recoup some of their own money, and use it to offset other state or local taxes they may be responsible for. The EITC is one way that both federal and state governments encourage low income families to continue to work, by offering the credit as an incentive, and the refundability helps keep families out of poverty.