How much would a state EITC cost?

It is relatively easy to estimate the cost of a refundable state Earned Income Tax Credit that is set at a percentage of the federal credit. The estimating procedure is a simple three-step process, which uses Internal Revenue Service data on the amount of federal EITC claims filed by residents of each state and U.S. Department of Treasury projections of the cost of the federal EITC in future years. Using these data, one would then:

1) Estimate the total amount of federal EITC claims in a given state for a future fiscal year.
2) Multiply federal claims by the percentage at which the state credit is to be set.
3) Adjust the estimate for the fact that not all federal EITC claimants will claim the state credit in the first few years.

For further information on the procedure and for cost estimates for your state, please see: "How Much Would a State Earned Income Tax Credit Cost in 2009?" from the Center on Budget and Policy Priorities.