Michigan Earned Income Tax Credit (EITC)

The Michigan Earned Income Tax Credit (EITC), like the federal Earned Income Tax Credit, is designed to supplement wages and reduce the taxes paid by workers with low and moderate income. It is currently 6% of the federal credit, but as recently as 2011, it was equal to 20% of the federal credit. In 2014, it was claimed by about 775,500 households who are raising over 1 million children, bringing nearly 6,800 of them out of poverty. The statewide average credit was $143, with families raising at least two children receiving a bigger benefit.

The EITC is a proven-effective anti-poverty tool that promotes work and reduces the need for public assistance, helping families take steps toward self-sufficiency. The EITC has been shown to have long-lasting positive effects on children, reducing the number of children in poverty, and helping them be healthier, do better and go farther in school, and earn more as adults. It also helps small businesses and boosts local economies by helping workers with low income pay for things that help keep them working, such as child care and transportation.

The effects of Michigan’s EITC are clear; however, it could do more. In 2011, when the EITC was 20% of the federal credit, Michigan taxpayers received an average of $446, and the credit helped pull over 22,000 Michigan families above the poverty line. If the credit were still equal to 20% of the federal credit, families receiving the credit would have seen an average of $334 more in their pockets to use in the local economy. Michigan’s lawmakers should do more to help their constituents and restoring the state EITC would be a good first step.


Average credit














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