States Fine-Tune the EITC.

• Position: TRENDS - Earned income tax credit

Last year, state lawmakers introduced more than 200 bills and enacted new laws in at least nine states related to the earned income tax credit. Hawaii, Montana and South Carolina created state credits, and California, Illinois, New Jersey and Rhode Island increased the percentage or reach of their credits.

All this is good news for low-income workers and families.

The federal government, 29 states, the District of Columbia, Guam, Puerto Rico and some municipalities use these tax credits to support the financial stability of low-income working families, especially those with children. EITCs reduce the tax liability of qualifying taxpayers in an amount determined mostly by their income level, marital status and number of dependent children. The federal policy has been in place since 1975, and Rhode Island enacted the first state credit in 1986.

State EITCs, which are mostly modeled after the federal credit, reduce low-income residents' state income tax liability. The policies vary somewhat by state in the ways they determine eligibility, in their methods for calculating credits and refunds, in their awareness and outreach efforts, and in data-tracking requirements.

Because many low-income workers don't know that receiving a state or federal EITC refund requires filing a return, they often miss out on credits that could help them. The average federal credit was $2,455 in 2016, yet 20 percent of eligible workers didn't claim it, according to the Internal Revenue Service.

In response, several states have made efforts to increase awareness of the program. Iowa and Maine, for example, require that beneficiaries of...