A new analysis of the Earned Income Tax Credit shows its effects are more significant in small towns and rural areas than in bigger cities.
A new analysis of the Earned Income Tax Credit shows its effects are more significant in small towns and rural areas than in bigger cities.Courtesy of Internal Revenue Service

Bailey says the higher use of the tax credit tracks right along with the other economic indicators that point to many rural families still struggling financially.

Nationwide, the number of those who claim the credit is less than 19 percent in metropolitan areas, compared with more than 21 percent in rural areas and small towns and cities. Bailey predicts that divide will continue to widen.

“Because the gap between rural areas and urban areas has been growing,” he says. “If that trend continues, I would suspect more people are going to need to use the Earned Income Tax Credit. It’s going to be even more important.”

Bailey says the increasing importance of the Earned Income Tax Credit to working families should send a message to federal policymakers to strongly consider proposals to expand its reach, making more people eligible.