State Earned Income Tax Credit 2026: 31 States Offer One, But Only Some Actually Refund It

9 min read · Last updated August 31, 2026

In this article

• What a state Earned Income Tax Credit actually is
• Who qualifies, and why your state decides how much you keep
• What it’s worth: a state-by-state look
• Same federal credit, three different outcomes
• How to claim your state credit
• Common reasons people get blindsided
• Frequently asked questions

Angela Ruiz filed her 2025 federal tax return in February 2026 with a $7,152 Earned Income Tax Credit (EITC) for her two kids, the maximum amount for that family size under Internal Revenue Service (IRS) rules for that tax year. Her cousin in New York had just used their state’s matching credit to cover a car repair. Angela lives in Ohio. When she looked for the same line on her Ohio return, the credit was there, calculated correctly, and it never touched her refund.

What a state Earned Income Tax Credit actually is

The federal EITC is a tax credit for people who work, sized to their earned income and the number of qualifying children in their household. For tax year 2025, the return most filers are working on this year, the IRS caps the maximum federal credit at $649 with no children, $4,328 with one child, $7,152 with two children, and $8,046 with three or more, according to the IRS’s own EITC tables. The maximum climbs to $7,316 for two children on the 2026 return filed in 2027, per IRS Revenue Procedure 2025-32.

A state EITC is a second credit, run by your state’s own tax department, layered on top of the federal one. Most states calculate it as a straight percentage of whatever federal EITC you already qualified for and claimed. If your federal credit was $7,152 and your state matches at 30%, your state credit is $2,146, before you even ask whether you’ll actually receive it.

Thirty-one states, plus the District of Columbia and Puerto Rico, currently run a state EITC, per ITEP’s 2025 state EITC brief, a nonpartisan tax policy research group. Nineteen states have no state EITC at all. If you live in one of those nineteen, the federal credit is the only one you get, and nothing below applies to you.

Who qualifies, and why your state decides how much you keep

If you qualified for the federal EITC, you almost always qualify for your state’s version too. States rarely add extra income tests on top of the federal ones. The number that actually matters is not whether you qualify. It’s whether your state’s credit is refundable.

A refundable credit pays out even if it’s larger than the state income tax you owe. If your Ohio tax bill is $0 and your nonrefundable Ohio EITC is worth $2,146, you get $0. The credit only ever offsets a tax bill; it cannot generate a payment above that bill. A refundable credit works differently. It’s treated like an overpayment. If the credit exceeds your state tax liability, the state sends you the difference as a refund, the same way the federal EITC does.

Only four states, Missouri, Ohio, South Carolina, and Utah, offer solely a nonrefundable credit, per ITEP. Every other state EITC is fully or partly refundable. Maryland runs both a nonrefundable credit and a separate refundable one side by side: filers with a qualifying child can claim the larger of a 50% nonrefundable credit or a refund for the amount by which a 45% credit exceeds their state tax, and filers without children get a 100% refundable credit, under Maryland Tax-General Article § 10-704. Most low-income filers come out ahead taking the refundable option, even at the lower rate, because it isn’t limited by what they owe.

What it’s worth: a state-by-state look

The match rate varies far more than most filers expect. A neighbor’s 20% credit and your own state’s 5% credit tell you nothing until you know the refundability rule behind each one.

State	% of federal EITC	Refundable?	Source
California	Calculated independently, not a % of federal	Yes	CA Franchise Tax Board
New York	30%	Yes (full-year residents)	NY Dept. of Taxation and Finance
Minnesota	Calculated independently, not a % of federal	Yes	MN Dept. of Revenue
Maryland	45% (refundable option) or 50% (nonrefundable option)	Yes, filer’s choice	MD Tax-General § 10-704
Montana	20% (raised from 10% for tax year 2026)	Yes	Montana Code Ann. § 15-30-2318
Louisiana	5%	Yes	LA Dept. of Revenue, Form IT-540 instructions
Ohio	30%	No	Ohio Rev. Code § 5747.71
South Carolina	125%, no dollar cap	No	SC Dept. of Revenue, Form TC-60

South Carolina’s rate is the highest on this list, and worth the least to a filer with no state tax bill. A big percentage on a nonrefundable credit is a number on a worksheet, not your bank account.

Same federal credit, three different outcomes

Here’s the math with real numbers. Take a single parent with two qualifying children and $20,000 in earned income for 2025, filing in 2026. That income falls in the flat part of the federal EITC schedule, so she gets the full maximum tax year 2025 credit for two children: $7,152, per the IRS EITC tables.

Now assume her state income tax liability for the year, after her standard deduction and exemptions, comes out to $0, which is common at this income level.

• New York (30%, refundable): $7,152 x 0.30 = $2,146. She receives the full $2,146, because the credit is treated as an overpayment regardless of her $0 liability.
• Maryland (45% refundable option): $7,152 x 0.45 = $3,218. She receives the full $3,218, for the same reason.
• South Carolina (125%, nonrefundable): $7,152 x 1.25 = $8,940 on the worksheet. Because the credit can only offset tax owed and her liability is $0, she receives $0.

Same filer, same federal credit. The only variable deciding $2,146, $3,218, or $0 was one word: refundable.

How to claim your state credit

In nearly every state, you carry the federal credit you already claimed on Form 1040 onto a state schedule, which multiplies it by your state’s rate. You don’t calculate it from scratch.

1. Claim the federal EITC first. Your state credit is calculated from this number, so it has to exist before you can claim the state version.
2. Find your state’s EITC schedule. Most states name it clearly in their income tax instructions, often as a short attached worksheet (New York’s IT-215, for example).
3. Confirm the residency rule. Some states, including New York, pay the full refundable rate only to full-year residents, with reduced treatment for part-year or nonresident filers.
4. Check for a local add-on. New York City adds its own local EITC of 10% to 30%, and Maryland’s Montgomery County adds a local refundable credit of its own, per ITEP.
5. File even if you owe no state tax. This is the step people skip when their credit is refundable. A $0 tax bill doesn’t mean there’s nothing to claim.

Common reasons people get blindsided

You assume every state EITC works like your neighbor’s. A relative’s real refund in another state doesn’t mean yours will match. Look up your own state’s refundability rule directly; a generous-looking percentage can still be worth nothing.

You skip filing a state return because you don’t owe state tax. This is the most common way people leave a refundable state EITC unclaimed. The state can’t send a refundable credit until you file, even at $0 liability.

You confuse a nonrefundable credit with a small one. A 125% nonrefundable credit sounds bigger than a 30% refundable one, and on the worksheet, it is. What reaches you depends on your tax liability first. At $200 owed, a nonrefundable credit worth $8,940 on paper still nets you $200.

You assume your income disqualifies you at the state level. A handful of states, including California, Colorado, and Maine, extend eligibility to younger or older workers who don’t qualify federally, per ITEP. Check your state’s rules separately if age ruled you out.

If you’re checking income against other means-tested programs at the same time, the qualifying lines are usually different from the EITC’s. Our guide to 2026 Supplemental Nutrition Assistance Program (SNAP) income limits walks through how that program sets its own thresholds. And if your household includes children under 17, the Child Tax Credit is a separate federal credit based on the number of children rather than earned income, worth checking alongside the EITC, not instead of it.

Frequently asked questions

Do I qualify for my state’s Earned Income Tax Credit if I already claimed the federal EITC? In almost every state with its own credit, yes. States generally don’t add extra income tests beyond the federal ones. The exceptions run the other way: a few states extend eligibility to younger or older workers who don’t qualify for the federal credit at all.

What’s the real difference between a refundable and a nonrefundable state credit for me? A refundable credit pays out in full even if you owe little or no state tax, the same way the federal EITC works. A nonrefundable credit can only reduce a tax bill you already owe. If your liability is $0, a nonrefundable credit is worth $0 to you, no matter its percentage.

How do I actually claim my state’s Earned Income Tax Credit? Claim the federal EITC on your Form 1040 first. Then carry that dollar amount onto your state income tax return’s EITC line or attached schedule, which applies your state’s percentage automatically. Most tax software does this step for you once the federal credit is entered.

Does claiming a state EITC affect my eligibility for SNAP or other benefits? No. Tax credits, including the federal and state EITC, are not counted as income for SNAP, Medicaid, or most other means-tested benefit programs. Claiming your EITC, at either level, will not reduce your benefit amount or disqualify you from other government assistance you already receive.

My state’s EITC percentage looks smaller than a neighboring state’s. Does that mean I’m getting less? Not necessarily. A smaller percentage on a refundable credit can be worth more in real dollars than a larger percentage on a nonrefundable one, if your state tax liability is low. Check both the rate and the refundability rule before comparing two states.