This report examines state earned income tax credits (EICs) as a means to assist working poor families to escape poverty. Specifically, the report notes that six states have their own EICs, expressed as a percentage of the federal EIC, with the advantages being that the credit is a reward for work, is a pro-family policy, is efficiently targeted, prevents states from taxing families deeper into poverty, and offsets the effects of regressive state and local taxes. Following a summary and introduction in Chapter I, chapter II, entitled "Poverty and Work", reviews the extent to which work alone no longer alleviates poverty and covers the education-related subject of "child poverty". Chapter III examines the structure of the federal EIC and the role it plays in helping to "make work pay." Chapter IV examines the purposes that a state credit serves and the key decisions in designing a credit. Chapter V takes a closer look at the need to improve state tax progressiveness and the role of a state EIC. Chapter VI discusses the need for outreach to eligible families once a credit is enacted. Chapter VII describes the legislative and political processes by which EICs became law in Wisconsin and Maryland. Included are five graphs and eight tables. An appendix provides information on calculating the state revenue impact of an EIC. Forty-four footnotes are included. (JB)