New economic well-being data on the KIDS COUNT Data Center reveals that the number of Kentucky tax payers filing for the federal Earned Income Tax Credit (EITC) rose from 17.3 percent (296,273) in tax year 2000 to 20.7 percent (379,255) in tax year 2008, Tax year 2009 data will likely show a significant jump due to the EITC expansions within the American Recovery and Reinvestment Act of 2009.
The federal EITC allows low-income working families to deduct part of their earned income from their federal taxes, and has lifted more children out of the poverty in the United States than any other federal program. A state EITC, coupled with the federal EITC, would further help struggling families meet their basic needs and stimulate Kentucky’s local economies by boosting consumer spending.
Updated economic well-being data also shows that the number of Kentucky tax payers filing for the federal Child and Dependent Care Tax Credit (CDCTC) increased from 4.3 percent (76,447) in tax year 2003 to 4.5 percent (79,485) in tax year 2008.
The federal CDCTC allows working families to deduct some employment-related childcare costs from their federal taxes. Kentucky has a state CDCTC similar to the federal credit, however neither the federal nor state CDCTC is fully refundable. This means that families exempt from paying income taxes, due to low amounts of earned income, do not receive any compensation from the credit. Making the state CDCTC fully refundable would provide support to those low-income working families who need it the most.
For more information about enacting a state EITC and a fully-refundable CDCTC, visit the following KY Kids in Focus blog posts:
- State Earned Income Tax Credit Now Would Help Alleviate Child Poverty in Kentucky
- A Refundable Child and Dependent Care Tax Credit Would Help Offset the High Cost of Child Care for More Families
KIDS COUNT Data Center
You can access the most up-to-date and historical data for more economic well-being indicators, including: Fair Market Rent (FMR), the percent unable to afford FMR, and the hourly wage needed to afford FMR; as well as children receiving WIC, KTAP, and food stamps.
The KIDS COUNT Data Center provides information across states and for Kentucky counties and school districts on many measures of child well-being, including: economic well-being, education, health, and safety. Users can easily rank, map, graph trends over time, and add customized information to their own websites. Users can also view and share data quickly and easily anytime and anywhere with the enhanced mobile site for smart phones.
Looking for more information? Research and recommendations for improving outcomes for the Kentucky KIDS COUNT indicators can be found in the annual Kentucky KIDS COUNT County Data Books here.