The Earned Income Tax Credit in Los Angeles County: Trends and Opportunities

The Earned Income Tax Credit in Los Angeles County: Trends and Opportunities has been published by the Center for Community Research and Solutions at the United Way of Greater Los Angeles.

This publication examines the federal Earned Income Tax Credit (EITC) in Los Angeles County. The research brief includes: a history of the EITC, participant eligibility, historic trends in participation, rates of participation across LA County, tax preparation trends (paid sites, volunteer income tax assistance sites or VITA sites, RALs or Refund Anticipation Loans), and more. In addition, policy options are examined, including linking EITC to asset building strategies.

Selected Findings:

• LA County residents file almost 4 million tax returns a year. About 1 in 5 of those in LA County that file, claim the EITC.
• In 2006, over 750,000 LA County taxpayers received the EITC, providing about $1.5 billion dollars back to the community, averaging about $2,000 per person.
• About $22.6 million was spent on Refund Anticipation Loans (RALs) in LA County in the 2005 tax year.
• 2 out of 3 tax payers claiming the EITC in LA County also purchase costly Refund Anticipation Loans (RALs).
• 23 states have their own EITC programs, which accounts for about half of the states that levy taxes.