Working-Family Tax Credit Essentials, Part 2: The Credits’ Lasting Benefits

Our first post in this series introduced our chart book on the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC), focusing on their well-known benefits of encouraging work and reducing poverty.  Today, we’ll highlight recent ground-breaking research suggesting that the EITC and CTC help families at virtually every stage of life.

As the chart explains, starting from infancy — when higher tax credits are linked to more prenatal care, less maternal stress, and signs of better infant health — children who benefit from tax credit expansions have been found to do better throughout childhood and have higher odds of finishing high school and thus going on to college.  The education and skill gains associated with the CTC and EITC likely keep paying off for many years through higher earnings and employment, researchers say.

This evidence is a major reason why it’s critical to make key provisions of the credits permanent, as our next post in this series will explain.

Image