Tax time doesn’t have to be stressful for low income working families thanks to the Earned Income Tax Credit (EITC). Seeking to keep families out of poverty and help them keep working regardless of wages, the tax credit is available on both a federal and state level for residents of Wisconsin. Wisconsin’s EITC is modeled directly after the federal credit and follows the same rules for eligibility, though in Wisconsin there is no credit offered to workers without children.

The Wisconsin EITC is offered at a percentage of the federal credit, depending on how many children the family has. The breakdown is as follows:

• 4% of the federal credit with one child
• 11% of the federal credit with two children
• 34% of the federal credit with three or more children

The state credit is fully refundable, which means that any amount of the credit that exceeds the tax liability is returned to the family via a refund. In cases where a family has no tax liability, the entire credit can be returned to the tax payer. This helps put more of their own money back into their hands, and can be used toward other substantial state or local taxes. The EITC has proven effective at reducing poverty and keeping families working, and has been a much welcomed tax benefit for working families.