An Earned Income Tax Credit (EITC) is a tax reduction and a wage supplement for low- and moderate-income working families. The federal government administers an EITC through the income tax, as do some states. States that enact EITCs can reduce child poverty, support welfare-to-work efforts, and cut taxes for families struggling to make ends meet. Altogether, 11 states now offer EITCs based on the federal credit. The federal EITC is considered the most effective antipoverty program in the United States for working families. It is estimated that the federal EITC lifts nearly 5 million people, roughly half of whom are children, out of poverty each year. Interviews with EITC recipients show that many use their refunds to make the kinds of investment, including paying for education, that enhance economic security and promote economic opportunity. Two appendixes show parameters of the federal EITC and the estimated cost of refundable state EITCs. (SLD)