In an effort to reduce poverty, the Earned Income Tax Credit (EITC) is an important tax benefit offered to working families with low incomes. Based on the federal credit, The Sooner State has offered a similar version of the credit on the state level. That means that taxpayers who claimed the federal credit will likely meet eligibility requirements for the state credit as well.
By putting more of their hard earned cash back where it belongs - in the taxpayer's hands - the credit seeks to lower poverty rates and encourage families to stay employed, no matter what the level of wages.
Oklahoma's credit is offered at 5% of the federal credit and is fully refundable. The EITC can offset the resident's tax liability, and any amount in excess of that is issued to the taxpayer as a refund. So, a family with zero state income tax liability can expect to get the full credit amount as a refund. This is what makes the EITC so effective at managing poverty, because the credit can be used to also offset other substantial state or local taxes that the family may owe.
The EITC is a welcome relief for many families, though it is often under-utilized. At tax-time, be sure to check eligibility and save your family a little extra.