By Edwin McLenaghan
Public Policy Analyst, BTC
- Three state tax credits – the Earned Income Tax Credit, the Child Tax Credit, and the Child and Dependent Care Tax Credit – effectively support work and promote healthy childhood development, both of which are important goals that expand opportunity for working families and provide wide-ranging and long-term benefits for the state.
- These credits put money into the pockets of more than a million families, helping them make ends meet and provide for their children. They also spur economic activity, as all of the money from the EITC and some of the money from the other two credits go to low- and moderate income families, who are more likely than wealthy families to spend the money in their local economies.
- Administration and application for these tax credits is simplified by leveraging similar programs at the federal level and introducing little complexity to tax forms. As a result, these public investments not only build and strengthen North Carolina’s middle class but also are cost-effective.