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State Income Taxes and Credits


Most states levy state income taxes, but the tax burden on low-income families varies significantly depending on where they live. A growing number of states offset this burden with state earned income tax credits and/or state child and dependent care tax credits. These credits are typically based on provisions in the federal income tax code, but states make all decisions regarding eligibility and benefit levels. [More detail...]

Federal decisions are italicized.

Income Tax Liability

Tax threshold

Income tax threshold for single-parent family of 31$10,400/year (2007)
Income tax threshold for two-parent family of 41$14,000/year (2007)

Tax burden

Income tax burden for single-parent family of 3 at 100% FPL1$316/year (2007)
Income tax burden for two-parent family of 4 at 100% FPL1$409/year (2007)

State Earned Income Tax Credit (EITC)

Income eligibility criteria

Income eligibility rules same as federal EITC2No state credit (2009)
Income limit for 1-parent family with 2 qualifying children2No state credit (2009)

Benefit level

Refundable credit available2No state credit (2009)
Percent of federal EITC2No state credit (2009)
Max benefit for family with 2 qualifying children2No state credit (2009)

State Child and Dependent Care Tax Credit

Income eligibility criteria

Income eligibility rules same as for federal credit3Yes (2008)
Income limit for family with 2 or more qualifying children3No limit (2008)

Eligible expenses

Child care expenses eligible by same rules as federal credit4No; expenses may be claimed up to a max of $2,400 for 1 child and $4,800 for 2 or more. (2008)

Benefit level

Refundable credit available3Yes (2008)
Benefit structure3Credit of 15-25% of eligible expenses, depending on income (2008)
Max benefit for family with 2 qualifying children3$1,200/year (2008)

Data Notes and Sources

Data on State Income Taxes and Credits were compiled by NCCP in June 2009. Some state policy decisions may have changed since these data were collected.

  1. Calculations include income tax credits that are available to all low-income families in the state, such as state earned income tax credits.
    Jason A. Levitis and Andrew C. Nicholas, The Impact of State Income Taxes on Low-Income Families in 2007, Center on Budget and Policy Priorities, 2008. Available at: http://www.cbpp.org (Accessed March 19, 2009).
  2. State EITC Online Resource Center, http://www.stateeitc.com (accessed June 3, 2009); with additional information from NCCP.
  3. Nancy Duff Campbell, Joan Entmacher, Amy K. Matsui, Cristina Martin Firvida, and Christie Love. 2006. Making Care Less Taxing: Improving State Child and Dependent Care Tax Provisions, with updates from National Women's Law Center, 2009 Supplement to Making Care Less Taxing. Washington, DC: National Women's Law Center.
  4. These include care expenses for children under 13 years that allowed the claimant to work or look for work, up to a maximum of $3,000 per year for one child and $6,000 per year for two or more children. Claimed expenses may not exceed claimant's earnings, or, in two-parent families, the earnings of the lesser-earning parent; full-time students are treated as having $250 per month in earned income (or $500 per month in families with two or more children).
    Nancy Duff Campbell, Joan Entmacher, Amy K. Matsui, Cristina Martin Firvida, and Christie Love. 2006. Making Care Less Taxing: Improving State Child and Dependent Care Tax Provisions, with updates from National Women's Law Center, 2009 Supplement to Making Care Less Taxing. Washington, DC: National Women's Law Center.