Eight Key Facts About the Earned Income Tax Credit and Georgia Work Credit

comprehensive report illuminating how a Georgia Work Credit would provide a significant, bottom-up tax cut to build Georgia’s middle class has been refreshed and enhanced with the latest available data. Here are a few important takeaways from the updated analysis from the Georgia Budget and Policy Institute.

The Earned Income Tax Credit (EITC) is a time-tested federal policy to cut taxes for workers earning modest wages, bolster the labor force and support families striving toward the middle class.

After filing their taxes, eligible households receive a credit based on income and family size. The EITC is designed to encourage work while gradually phasing out as families approach financial self-sufficiency.

  • About 87 percent of EITC dollars go toward paying bills, saving, affording basic needs or making important investments such as reliable transportation or higher education.
  • Twenty-nine states, including South Carolina, build on the success of the federal EITC with similar policies that reduce state taxes for working families. Georgia does not, but state lawmakers have discussed creating a “Georgia Work Credit” in recent years.


The Georgia Work Credit would give an economic booster shot to local businesses and communities, pumping about $300 million each year into local communities.

  • The credit also causes an economic multiplier effect, with every $1 of tax credit claimed by local taxpayers generating up to $2 of local economic activity.

A majority of Georgians (62 percent) support the creation of a Georgia Work Credit according to a 2018 Mason-Dixon poll. Only 17 percent of Georgians oppose the policy.


About 19 percent of white families in Georgia and 32 percent of families of color received the EITC in 2016. These families would also stand to gain from the Georgia Work Credit. That amounts to about 664,000 families of color and 439,000 white families.

Source: GBPI analysis of 2016 Internal Revenue Service data, American Community Survey 2016 1-year estimates and 2015 demographic breakdowns of EITC recipients from the Brookings Institution