The tax code is one of the largest tools that the federal, state, and municipal governments have to provide families with economic security and wealth-building opportunities. Yet, the tax code systematically disadvantages women, people of color, immigrants, and low-income families. Homeowners with home mortgages get tax breaks, but we know that people of color have been systematically left out of homeownership opportunities. High-income earners with retirement and other savings get tax breaks, but we know that women and people of color are more likely to be in jobs that do not pay enough or do not offer retirement savings opportunities. Furthermore, immigrant workers and families are increasingly excluded—either explicitly or implicitly—from these initiatives. These, and other tax code priorities, perpetuate the racial and gender economic gaps that exist in the U.S.

Learn more about equity and the tax code here.

The Earned Income Tax Credit (EITC) is a federal tax credit for people who work and have low-to-moderate earned income. The EITC reduces the amount of federal taxes owed and may also provide a refund.

The EITC puts money back into the pockets of low-income families, making it one of the largest and most effective poverty-reduction programs in the nation.  Each year, the federal EITC lifts millions of people out of poverty.  In 2024, the EITC lifted about 4.4 million people above the poverty line, including 2.3 million children.

Which states have an EITC?

Read about the basics of the EITC.

The federal Child Tax Credit (CTC) helps families manage the cost of raising children. Under current law, the credit is worth up to $2,000 per eligible child (under age 17 at the end of the tax year). In 2021, the American Rescue Plan Act increased the maximum credit amount to $3,600 for children under age 6 and $3,000 for children aged 6-17, made the credit fully available to children and families with low incomes, included 17-year-olds for the first time, and issued half of the credit through advance monthly payments. If the credit exceeds income taxes owed, taxpayers can receive up to $1,700 per child as a refund, known as the additional child tax credit (ACTC) or the refundable portion of the CTC.

Read more about the CTC.

What states have a CTC?

Read about the impact of state CTCs.

The Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC) put money back into the pockets of families with low income, which helps them buy groceries, pay utility bills, and buy school supplies today—and helps them create opportunities for the next generation by accessing additional education and training, securing reliable transportation, and saving for their children’s education.

Predatory practices are any practices or services that benefit a business or other entity at the expense of a poor or less powerful person. Predatory Practices often take advantage of poor people and perpetuate cycles of poverty.

Read more about predatory practices here.

Immigrants are paying billions of dollars each year in taxes. Despite their undocumented status, these immigrants—and their family members—add value to the U.S. economy, not only as taxpayers but also as workers, consumers, and entrepreneurs.

Immigrants in the U.S. contributed more than $19.5 billion in federal income taxes in 2024, and over $96 billion dollars in total taxes (including state, municipal, and sales taxes). The Institute on Taxation and Economic Policy reports that $33.9 billion of that total $96 billion went toward funding social insurance programs that these individuals are barred from accessing because of their immigration status.

The Individual Taxpayer Identification Number (ITIN) was created by the IRS in July 1996 to allow foreign nationals and other individuals who are not eligible for a Social Security Number to comply with U.S. tax laws and pay taxes.

• ITIN holders are not eligible for all tax and public benefits that U.S. citizens and other taxpayers can receive. For example, an ITIN holder is not eligible for Social Security benefits or the Earned Income Tax Credit (EITC).
• ITIN holders are not eligible for the Child Tax Credit (CTC).  To receive the CTC for children, at least one parent in the household must have a valid Social Security Number. If a child does not have an SSN, he or she is not eligible for the tax credit.

See this map of states that allow ITIN holders to receive state EITC.