Working families across Oregon are struggling to afford the rising cost of living — the cost of housing, food, and other essentials. That situation was made worse last July when Congress passed H.R. 1, a massive package of tax cuts overwhelmingly favoring the rich and corporations, paid for in part by historic cuts to federal safety net programs that feed families and help them access healthcare.
One important step that state lawmakers can take to address the affordability crisis facing hardworking Oregon families is strengthening Oregon’s Earned Income Tax Credit (EITC).
The EITC is a refundable tax credit that boosts the incomes of working families. A modest increase in the Oregon EITC by 5 percentage points would send some $26 million to hardworking Oregonians, helping struggling families cope with the rising cost of living.
The EITC is a proven tool to boost economic security
The EITC is the largest anti-poverty program in the Oregon tax code, helping nearly 230,000 working families struggling to make ends meet every year. The EITC is a refundable tax credit, meaning if the value of a family’s credit exceeds the amount of taxes they owe, the difference is returned to them in the form of a tax refund. The refundable nature of the EITC makes it an efficient means of putting dollars into the pockets of working families struggling to get by.
The amount of EITC a family is eligible for varies based on their income, marital status, and how many children they have. For low-income families with multiple children, the federal EITC can be worth more than $8,000 when they file their taxes.[1] Oregon’s EITC functions as a percentage of a filer’s federal credit. The state offers a nine percent match of the federal for most filers, except for families with children under age 3 who receive a 12 percent match.[2] The Oregon EITC delivers more than $50 million to working families each year.[3]
The EITC efficiently steers cash to the families struggling most with the rising cost of living. Nearly 9 of every 10 dollars of an increase in the EITC would flow to the bottom 40 percent of Oregonians. About half that would flow to the bottom 20 percent of Oregonians.
The broad benefits of the EITC are well documented. The federal EITC helps lift about 68,000 Oregonians, including 34,000 children, out of poverty each year.[4] For children, the EITC has a lasting impact. A substantial body of research shows that tax credits such as the EITC improve child health, boost school performance, promote college enrollment, and increase earnings when children become adults.[5]
The benefits of increases to the EITC extend beyond the families who claim the credit themselves. Eligible families tend to spend their EITC refunds quickly at local businesses, as they make purchases to meet their basic needs. This spending generates more economic activity. Researchers estimate that each federal EITC dollar results in $1.40 to $1.58 in activity in the economy, as local businesses use EITC dollars to purchase goods and services and pay employees, and employees spend their earnings.[6]
Boosting the EITC would steer much needed resources to hardworking Oregonians
What would increasing the EITC by 5 percentage points mean for Oregon families? Consider a married couple with two kids ages four and two living in Malheur County. One parent works full time at a job that pays $14.05 per hour, the minimum wage for rural Oregon, while the other parent stays home to care for the children. Under current law, they would qualify for an Oregon EITC worth about $860. Increasing Oregon’s match of the federal EITC by just 5 percentage points would boost this family’s Oregon EITC to nearly $1,220, helping them better afford groceries, utility bills, and other essentials.
Conclusion
The EITC is a proven way to efficiently steer additional cash to hardworking Oregonians. Increasing the state’s match of the federal EITC would better help those families make ends meet.
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Appendix A: Impacts of Boosting the EITC by County
Appendix B: Impacts of Boosting the EITC by Senate District
Appendix C: Impacts of Boosting the EITC by House District
[1] Internal Revenue Service, Earned Income Tax Credits (EITC) tables, accessed January 14, 2026.
[2] State of Oregon, Tax Expenditure Report 2025-27, p. 132.
[3] Ibid.
[4] Center on Budget and Public Policy analysis of CPS public use files from the U.S. Census Bureau, with corrections to underreporting of benefits from TRIM (Urban Institute/HHS).
[5] Chuck Marr, et al., The EITC and Child Tax Credit Promote Work, Reduce Poverty, and Support Children’s Development, Research Finds, Center on Budget and Policy Priorities, October 1, 2015.
[6] Antonio Avalos, Sean Alley, The Economic Impact of the Earned Income Tax Credit (EITC) in California, The California Journal of Politics & Policy, 2010, Vol. 2, Issue 1. Also, Targeted Messages Why me? EITC and Other Refundable Credits, IRS.
