The Earned Income Tax Credit and Health Outcomes

Health agencies increasingly engaged in awareness efforts

The Earned Income Tax Credit (EITC) not only puts thousands of dollars into the hands of low-wage workers, it improves health outcomes particularly in the areas of infant and maternal health.  While improved health outcomes for those who receive the EITC have long been known, as more data becomes available health-related organizations are increasingly committing time and resources to ensure families are taking advantage of this valuable cash-back tax credit.

The research and data are compelling:

  • Healthier babies – $1,000 increase in EITC refunds decreased low-birth weight infants by 5.6% overall (and even more for African-Americans)1
  • Reduced stress – EITC income improves the likelihood of heads of households reporting to be in excellent or very good health by 6.9 to 8.9%2
  • Increased nutritional food purchases – EITC recipients increased spending on healthy food by 10.5 to 20.3% 2
  • Greater use of health insurance coverage – 2 to 4% higher uptake rate of private health insurance by families receiving the EITC3

Helping to prompt the increased focus on EITC awareness is the Health Impact in 5 Years (HI-5) plan from the Centers for Disease Control and Prevention (CDC), which specifically identifies the EITC as an intervention tactic for addressing the social determinants of health. Moreover, in a recently released guide from the CDC Foundation, the EITC is called “one of the most effective public health interventions.” The guide details concrete action steps public health agencies can take to help increase the EITC participation rate—many of which the Get Ahead Colorado campaign utilizes in working with its public health agency partners.

Our campaign collaborates with these agencies to provide training to direct service workers along with talking points and educational resources to share with their patients and clients—encouraging them to file their taxes (even if they are not required to do so) and claim the EITC. In Colorado, the EITC participation rate hovers around 75%, meaning one in four of those eligible to receive the credit are not claiming it. Our campaign is working to better understand who those individuals are so we can more effectively reach them with the message to take advantage of this cash-back tax credit.

The more we know, the more we are able to work strategically to ensure families are claiming the EITC and accessing additional resources that help them get ahead. Learn more about the Get Ahead Colorado campaign and the EITC.

More Resources:

EITC Funders Network video series on the EITC and Health Outcomes
Tri-County Health Department Partner  Profile Video
To reduce child poverty, increase EITC participation Report

1 – Child Trend – To reduce child poverty, increase EITC participation
2 – Massachusetts Budget and Policy Center – A Credit to Health:  The Health Effects of the Earned Income Tax Credit
3 – The effects of income on health: new evidence from the Earned Income Tax Credit