An eastern Iowa think tank is pushing legislators to allow more Iowa parents with children 18 and younger to qualify for a tax break. The federal Earned Income Tax Credit is for parents who work, but have low wages.
Twenty states, including Iowa, allow parents to claim a portion of that credit on their state income taxes, too. A report from the Iowa Policy Project concludes that increasing the state credit to 15% of that federal Earned Income Tax Credit would "lift more than three-thousand Iowa families out of poverty."
According to the report, expanding the Earned Income Tax Credit helps those families rely less on public assistance, as the parents’ take-home pay goes up. An Iowa Policy Project researcher says the change would make a long term "dent" in poverty, because children raised in poverty tend to earn less as adults and tend to rely on public assistance.
