Earned Income Tax Credit Strengthens Local Economies, Helps Utah Families Get Out of Poverty

1 in 4 eligible Utahns fail to claim tax credit each year

(Salt Lake City, UT) – Lt. Governor Spencer Cox and the Utah Department of Health (UDOH), in partnership with the Utah Coalition for Protecting Childhood and Utah Tax Help, encourage eligible Utahns to file for the Federal Earned Income Tax Credit (EITC) as this tax credit has positive impacts on vulnerable individuals’ health and the local economy.

“While most individuals who receive some form of public assistance do have an income, that income is often not sufficient to meet the basic needs of their families,” said Joey Thurgood, child abuse prevention specialist with the UDOH. “Families experiencing economic instability and poverty are at a greater risk of experiencing difficulties with mental and physical health, substance use, domestic violence, and child abuse.”

The EITC is a tax benefit for working people with low to moderate incomes. It reduces the amount of taxes owed and may even provide tax refunds for some tax filers. Increasing the number of eligible Utahns claiming the EITC is supported by many organizations including the UDOH, Utah Department of Workforce Services (DWS), Volunteer Income Tax Assistance (VITA), Utah Tax Help, Intergenerational Poverty Commission, and Utah Coalition for Protecting Childhood.

“Increasing the number of citizens claiming the credit can have a direct impact on the financial stability of families at risk for domestic violence, child abuse, suicide, and addiction, thus improving the overall health outcomes for those Utahns,” said Thurgood.

Every year, one in four eligible Utahns fails to claim the EITC. Last year, 171,000 Utah tax filers received the tax credit; however, 57,000 Utahns were eligible and did not claim it. The average credit for a Utah filer with children in 2019 was $2,130. For single people without children earning less than $15,000, the average tax credit was $300. The current EITC filing participation rate in Utah is 75% and has remained unchanged over a number of years.

“More than 60% of the adults experiencing intergenerational poverty are among the working poor and eligible for the Earned Income Tax Credit,” said Tracy Gruber, director of the Office of Child Care at the DWS. “Since originally enacted by President Ford, the Earned Income Tax Credit has played a critical role in improving the outcomes not only of adult income earners but also for their children who experience improved health and academic outcomes.”

The EITC is concentrated among the lowest earners, with much of the credit going to households in the bottom three quintiles of the income distribution. Research shows that the EITC encourages single people and primary earners in married couples to work.

Additionally, the EITC can free up resources for childcare expenses by decreasing the amount of taxes owed. Research finds that single mothers, especially those with low wages, are more likely to be employed and experience an increase in earnings when they receive the EITC. Single mothers receiving the EITC are more capable of paying for childcare and, thus, can get and maintain a job easier.

It’s estimated the EITC has the potential to infuse an additional $10-20 million into local Utah economies. “Our analysis shows that for every 1,000 EITC claimants, we bring in $1,000,000 into the state,” explained Greg McDonald, director of the Community Action Partnership of Utah and VITA coordinator. “Our initial target is 22,000 more people claiming the EITC. When we achieve that goal, Utah will have the highest number of EITC claims of any other state, with many families moving toward financial security.”

For more information on the EITC, visit https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit. Utahns may also get free help filing their taxes and claiming the EITC from Utah Tax Help by visiting https://utahtaxhelp.org/.

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Media Contacts:
Katie McMinn, UDOH
385-272-6306
Greg McDonald, Utah Tax Help
801-856-7746