We have carried out transient photoconductivity experiments on hydrogenated and unhydrogenated polysilicon Thin Film Transistors (TFTs) which indicate that the primary effect of plasma hydrogenation is the reduction by several orders of magnitude of the band tail trapping states. A smaller effect is a reduction of the dangling bond density by a factor of 2 or 3 as indicated by Electron Spin Resonance (ESR) measurements. Since the dangling bond is associated with the generation/recombination center, it may not be obvious how such a small reduction in generation/recombination center density leads to over 2 orders of magnitude reduction in off-state current of the TFTs. In this paper, we describe how the large reduction of band tail states can lead to significant reduction of carrier generation near the contacts despite the fact that the generation/recombination center density is not changed significantly. This reduction of carrier generation leads to the observed reduction in off-state currents.