For working families with lower incomes, tax time can be extra stressful. Thankfully, there\u2019s the Earned Income Tax Credit (EITC), which seeks to return more of the taxpayer\u2019s earnings by way of a refund. This credit is an important part of a poverty reduction plan, as it seeks to keep families working even under low wages. The state of Ohio has enacted their own version of the federal credit, and has modeled their version similarly.<\/p>\n
Following very close eligibility requirements, an Ohio resident who qualified for the federal credit can also claim the state credit, which is offered at 10% of the federal amount. Ohio joins Delaware, Maine and Virginia to be the fourth state out of twenty-five (and D.C.) that offer EITCs, in making their state version non-refundable.<\/p>\n
By not issuing the excess amount of the credit back the taxpayer, the EITC does little to combat poverty. A non-refundable EITC can lower the amount of state income tax that a family owes, but after that the credit diminishes, meaning it can\u2019t offset other state or local taxes. Additionally, Ohio\u2019s version of the EITC is limited to half of the income tax owed on income above $20,000.<\/p>\n
Still, by reducing the amount of income tax owed, the credit can be beneficial to families trying to make ends meet at tax time.<\/p>\n","protected":false},"excerpt":{"rendered":"
For working families with lower incomes, tax time can be extra stressful. Thankfully, there\u2019s the Earned Income Tax Credit (EITC), which seeks to return more of the taxpayer\u2019s earnings by way of a refund. This credit is an important part of a poverty reduction plan, as it seeks to keep families working even under low […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[126],"tags":[60,333,321],"class_list":["post-913","post","type-post","status-publish","format-standard","hentry","category-states","tag-eitc","tag-ohio","tag-state-income-tax"],"yoast_head":"\n