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Kentucky's Rural Workers Rely on Earned Income Tax Credit

Greg Stotelmyer

Rural living can be a struggle in Kentucky.  

In fact, for more than a quarter of the state's rural workers, the Earned Income Tax Credit (EITC) keeps them above the poverty line, according to new research from the Center for Rural Affairs.

The EITC is a refundable federal credit that 27 percent of rural Kentuckians claim, compared to less than 20 percent who live in metro regions.

Report author Jon Bailey calls the tax credit effective, but also points to its use as reflective of other economic indicators for rural areas.

"It's another example of a poverty-alleviation, safety net program that's used more in rural places,” he stresses. “That follows along with the rural economy and all of the data on the rural economy compared to urban economies."

Statewide, 22 percent of those eligible claim the federal tax credit.

Bailey says there has been talk about updating the credit, and he believes this new research makes the case that changes are needed.

"It's the kind of policy that I think deserves some real analysis as far as the expansion of it and making it available to more people," he says.

A refundable tax credit means families qualifying and filing for the EITC, receive federal income tax refund payments, cash that Bailey says is quickly circulated through communities.

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