Tax time can be extra stressful for working families with state income tax liabilities, especially if their income is lower than average. Thankfully, the government has offered the Earned Income Tax Credit (EITC) to working families with low wages as a way to help reduce poverty and encourage employment despite minimal salary amounts. The state of Oregon has enacted their own version of the federal government's EITC.
Because the state followed the same eligibility requirements, a family that was able to claim the federal credit can also claim the state credit, making the credit a welcome relief for low income working families.
Oregon offers the EITC at 8% of the federal credit, and they have chosen to make their version fully refundable, which is the key to success. The refundable credit gives taxpayers the opportunity to offset their state income tax liability and then receive the excess amount as a refund. A family without any tax liability can expect to get the entire EITC amount refunded. The credit can even make up for other taxes, such as state and local, that can be substantial to a family. This tax season, be sure to check your eligibility for the EITC, both federal and state, as it could make a huge difference on your wallet.