The EITC and Racial Income Inequality

This research brief shares findings from new analysis of income data of Black and white households who participate in the Earned Income Tax Credit (EITC) program, a refundable tax credit that serves as the primary income support for low- and moderate-income families in the United States. The brief notes that because the EITC is conditioned on a household's employment and work hours, its benefits to Black workers and families may be tempered by persistent structural barriers to employment and labor market discrimination. The findings also recognize that take-up of the EITC depends on workers’ awareness of the benefit and the decision to file an income tax return. Community-based organizations and tax assistance programs have an important role in promoting awareness of the EITC and providing tax filing assistance so more eligible families can receive the program’s benefits.