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The EITC is the primary employment-based antipoverty program in the United States. Research shows that the tax credit is effective, helps to reduce race-based income gaps, and supports local economies.
The program reduces the amount of federal income tax owed at tax time (or yields a tax refund) for many low-income families. How much of a tax credit a person can claim is based on income and household size.
Conducted in New York City, the “Paycheck Plus” experiment tested the effects of dramatically increasing the EITC for single adults with no dependent children. It found that the promise of a higher maximum didn’t cause recipients to reduce their overall earnings from work.
Read the full research article by Oscar Perry Abello about public assistance from MDRC