By Ashley Burnside

Today is Tax Day, the traditional deadline when people pay their taxes to help provide necessary revenue for public goods that promote economic mobility and allow communities to thrive. (This year, however, the IRS has pushed off the deadline until July 15, in response to the COVID-19 crisis.) Many tax filers will also receive a refund this tax season called the earned income tax credit (EITC). The EITC is a refundable tax credit for low- and moderate-income earners that reduces the likelihood of millions of workers being taxed into poverty. The EITC also has numerous long-term positive outcomes for children, adults, communities, and our economy. Here are the top ten reasons to love the EITC:

1. The EITC is a highly effective anti-poverty tool. The EITC lifted about 5.6 million people out of poverty in 2018, including about 3 million children. In addition, the EITC reduced the severity of poverty that 16.5 million people faced in 2018.

2. The EITC supports and encourages work. Many studies have proven that working-family tax credits encourage work. The EITC is especially effective at encouraging work among single mothers who work in jobs that pay low wages.

3. The EITC helps families afford necessary expenses. Many families spend their tax refund on necessary expenses such as home repairs, car repairs, and in some cases additional education or training to increase their job and earning prospects. These expenses can help families find and maintain employment.

4. The EITC reduces evictions. Many workers use their refund to make a housing payment. In his book, Evicted, Matthew Desmond reports that evictions decline in February because many families who file their taxes early dedicate some or all of their EITC to pay back rent.

5. The EITC benefits the local economy. The EITC benefits not only families with low incomes but also the communities in which they live. Many families spend their EITC at local businesses, spurring economic growth and jobs.

6. The EITC can be advanced at the state and federal levels. States can supplement the federal credit with a state EITC to build stronger economies and support individuals in poverty. A mix of 29 red and blue states and the District of Columbia and Puerto Rico have created their own state EITCs that build on the benefits of the federal credit.

7. The EITC helps promote racial equity and reduces poverty for communities of color. Communities of color disproportionately work in jobs that pay a low wage, and the EITC can help fill this financial gap that workers of color face. Federal and state EITCs serve a larger proportion of people of color compared to those who are white, lift a larger share of people of color out of poverty, and help families of color build wealth.

8. The EITC improves long-term outcomes for recipients’ children. When families receive the EITC, their children have better economic, education, and earning outcomes. For example, when families receive credits as little as $1,000, research has shown that it improves children’s test scores, increases their likelihood of attending college, and increases their chances of earning higher wages as adults. Recent evidence from the National Academies of Sciences finds that reducing child poverty through income supports improves outcomes across health, mental health, educational attainment, and earnings into adulthood.

9. The EITC has bipartisan support. The EITC has long enjoyed support from both Democrats and Republicans because it fights poverty, invests in communities, and encourages and rewards the work of people with low and moderate incomes.

10. The EITC can, and should, be expanded to reach more workers not raising children. Right now, individuals who are not raising kids have limited access to the EITC despite being vital members of our communities. These workers without dependent children receive a much smaller refund and, consequently, they’re the only group being taxed into poverty. Both Democrats and Republicans have supported proposed changes to the EITC for workers without dependent children, including phasing the credit in faster, raising the maximum credit, and lowering the eligibility age. Expanding the EITC could benefit over 16 million workers, including young workers, older workers, noncustodial parents, and veterans. Communities that are likelier to live in poverty, including communities of color and the LGBTQ community, would also likely benefit from this policy change.