Tax Credits For Working Families
A new brief from the N.C. Budget and Tax Center explains the benefits of state tax credits targeted at working families.
The design of a tax system, just like a state budget, reflects the values and priorities of a state. North Carolina’s lawmakers have identified effective tax credits for working families as critical tools for promoting work, supporting child development and growing the state’s middle class.
At the same time, these tax credits, especially the Earned Income Tax Credit, go some way toward minimizing the existing upside‐down nature of the tax system, which requires lower‐income households to pay more in total state and local taxes as a share of their income than higher‐income households do. Evidence has found that such supports for families with children reap benefits for decades through improved school achievement and earning potential.
North Carolina’s policymakers should continue to support these investments. The benefits will be shared broadly through a stronger middle class now and in the future.
Click here to access a table that breaks out the use of the three tax credits by county.