The Earned Income Tax Credit

Issue Notes

Vol. 4, No. 4 April 2000

The Earned Income Tax Credit

By Pamela Friedman
Background

The Earned Income Tax Credit (EITC) provides support for families that are making the transition from welfare to work. Workers who qualify for the EITC and file a federal tax return can receive a refund of some or all of their federal income tax. Because it is refundable, eligible families receive the full amount of the credit even if that amount is greater than the amount of taxes owed. Qualifying families with no tax liability receive the entire credit as a refund.

The EITC is not considered "assistance" for purposes of Temporary Assistance for Needy Families (TANF). Receipt of the credit will not reduce a family’s food stamp benefits if the refund is spent within 12 months. Nor will it affect receipt of Medicaid, Supplemental Security Income, or federal housing subsidies so long as the refund is spent within a month of its receipt. Child care subsidies may be affected based on specific state policies. Welfare recipients who participate in work experience programs in exchange for their welfare benefits may not count that income in determining EITC eligibility.

The EITC was created by Congress in 1975 to help offset the Social Security payroll tax and to make work more attractive than welfare. The credit has been expanded three times. In the 1986 Tax Reform Act, phase-in ranges and phase-out ranges were increased, and a larger credit was provided for families with two or more children. In 1991, the EITC was no longer counted in determining eligibility for most means-tested programs. The 1991 expansion enabled taxpayers with children living with them for more than half the year to receive a credit, regardless of who provided child support. In 1994 a small credit was made available to low-income families without children.

In tax year 2000, families having more than one child and earning less than $31,152 receive a credit of up to $3,888. Working families with one child and workers with no children will see a slight increase in their credit. In addition, a working grandparent caring for grandchildren may also qualify for the EITC. Likewise, a foster parent, step-grandparent, or other relative caring for children may also be eligible if the children lived in the household all year and were cared for as members of the family. Caring for a child who was formally placed by an authorized placement agency may also qualify a worker for the EITC.

President Clinton has proposed a $21-billion EITC expansion over ten years that would expand the maximum credit for working families with three or more children by $500. The proposal also expands the credit for married, two-earner couples, providing an average of $250, and lowers the phase-out rate for families with two or more children. In addition to the federal credit, 12 states and one locality now offer EITC"s based on the federal credit. Illinois recently became the 12th state to enact an EITC. Indiana also has a state credit, but it's rules and structure are not based on the federal EITC. Enacted in 1999, Indiana's EITC is for working families with incomes below $12,000. The maximum credit for qualifying families is $408. The credit is applied for by completing the IN-EIC shedule attached to the state income tax form.

This Issue Note highlights some of the options available to states wanting to increase use of the tax credit. It also discusses design issues that states should consider when developing a state EITC.

Policy Issues

Why should states be concerned about the EITC? The EITC supports the "work-first" principles of welfare reform. Only families that work are eligible to receive the credit, and the amount of the credit depends on a family’s labor market earnings. Participation at the national level is 80 percent, which is higher than participation in other means-tested programs (see Smeeding et al., 1999). Expansions to the EITC, implemented in the early 1990s, have resulted in a 40-percent earnings subsidy for low-income families in 1999, compared with a 19.5-percent subsidy in 1993. Because the credit may provide additional income to working families, it enhances the incentive to work, helping TANF recipients avoid time limits on assistance. To the extent that families worry about the future and believe they may need TANF support at a later date, the EITC enables them to forgo TANF when working and to preserve future benefits (see Acs et al., 1998). Moreover, because the credit is not considered assistance, federal time limits do not apply to recipient families so long as they do not receive other countable cash benefits.

The credit is flat for a range of earnings and is then phased out as earnings increase. For those with higher incomes, it offsets taxes. For minimum wage workers who do not owe any taxes, it provides additional income. By reducing the tax burden on families, the EITC strengthens their self-sufficiency and provides them with more disposable income. A study by the Council of Economic Advisers found that families receiving a refund planned to use at least part of their refund to pay off a debt, repair or buy a car, pay for education, or save for future expenses. Smeeding (1999) also found that a large percentage (49 percent) of recipients planned to save some or part of their refund. Recipients’ efforts to enhance their "social mobility" reinforce welfare reform’s objective to encourage self-sufficiency.

How can states promote the use of the federal EITC? There are several reasons why workers do not participate in the EITC. Because the federal EITC is administered through the tax code, recipients must claim the credit when they file their income tax form. Many low-income workers may hesitate to do so because of their immigrant status, because they have not filed taxes in some time, or because they may owe child support. They may not be aware of their eligibility, they may be fearful of filing a tax return, or they may distrust information provided to them by employers. Others may believe that the credit is too small to justify filing. Agency staff may want to collaborate with local community groups to help alleviate workers’ fears. In addition to publicizing the EITC through employers and state welfare offices, states may want to consider distributing information through agencies or organizations in neighborhoods where workers reside. State agencies wanting to encourage increased worker participation in the EITC may also want to consider publicizing the program through welfare department or job training service providers.

According to Candice Cromling, national program manager for the Internal Revenue Service’s National Program for the Earned Income Tax Credit, nearly 6 million people who are eligible to claim the advance credit do not. In 2000, advance payments are available to workers with at least one qualifying child who expect an annual income of less than $27,413. For workers who are not raising children in their home, the credit is not available in advance payments. The advance payment option can increase a family’s take-home pay by up to $115 per month. However, more than 95 percent of those who receive the credit opt for a lump-sum payment. Research suggests that recipients view the refund as "forced savings" and tend to use the funds received to build assets and make major purchases. Another reason recipients may not take advantage of the option is that the unsteady employment relationships of many low-income households may make it difficult for workers to keep the necessary tax forms on file with their employers (see Barrow and McGranahan, 1999). In addition, few employers are aware of the option and, therefore, do not publicize it to their employees.

As part of a campaign to generate interest in and education about the EITC, the Center on Budget and Policy Priorities (CBPP) has prepared a kit that agencies and organizations can use in designing an outreach strategy. CBPP recommends distributing materials at transitional housing programs, drop-off and pick-up spots for day labors, regional service industry chains, and homeless shelters. CBPP also recommends that agencies encourage workers to take advantage of the Volunteer Income Tax Assistance (VITA) program. VITA is a free IRS-sponsored program to help low-income workers fill out their tax return. Contact: John Wancheck, 202/408-1080.

The American Friends Service Committee collaborated with the West Virginia Department of Health and Human Resources to organize a mail campaign to former TANF recipients and other low-income workers. The campaign was initiated in response to a survey conducted by the University of West Virginia that found that nearly 80 percent of former welfare recipients did not claim the EITC. In mid-February, flyers were sent to nearly half the total caseload of former TANF recipients statewide. In addition, the department intends to actively publicize VITA sites throughout the state. Contact: Rick Wilson, 304/529-3890.

Why should states consider implementing a state EITC? A state EITC can enhance a state’s commitment to assist former welfare recipients as they move toward self-sufficiency by reducing their tax burden. It can also strengthen efforts to reward work. The federal EITC only offsets federal taxes paid by low-income workers, some of whom still pay a disproportionate share of their income in state and local taxes. States rely, to a large extent, on revenue from regressive sales and excise taxes that typically consume a greater share of the incomes of low- and moderate-income families. A state credit enables low-income families to share in their state’s prosperity. A state credit may also support local economic development efforts, because workers are likely to spend a portion of their refund in their local communities. A state credit may also result in savings on expenditures for public service and benefit programs provided by the state, because the increase in income to working families will decrease their need for these services. States can use unspent federal welfare block grant funds or available state TANF or maintenance-of-effort (MOE) surpluses to establish or expand a refundable state earned income credit.

States interested in implementing an EITC need to address several design issues. They must define eligibility, decide whether to base the state tax credit on the federal EITC, and, if so, determine the relationship between the two credits. In addition to determining the costs or revenue reductions they are prepared to incur, states need to consider the level of state income tax relief desired and the desired financial boost for qualifying families. Currently, ten states use federal eligibility rules and base their tax credit on a percentage of the federal EITC. EITCs in states with refundable credits range from 8.5 percent to 25 percent of the federal credit, with the exception of Minnesota and Wisconsin. Minnesota’s credit ranges from 22 percent to 46 percent of the federal credit, depending on family size and income; the average is 29 percent for families with children. Wisconsin’s credit ranges from 4 percent to 43 percent and is based on the number of children in the family.

States must also decide whether to have a refundable or nonrefundable EITC. Eight of the twelve states that have state credits—Colorado, Kansas, Maryland, Massachusetts, Minnesota, New York, Wisconsin, and Vermont—have refundable credits. Illinois, Iowa, Oregon, and Rhode Island have nonrefundable credits. A refundable state EITC functions similarly to the federal credit. A family receives a refund if the size of its EITC exceeds its tax bill. The amount by which the credit exceeds annual income taxes is paid as a refund. If the credit is nonrefundable, the state income tax owed by a family is reduced or waived, but it does not receive any excess as a tax refund. Although both credits provide relief, the refundable credit provides more assistance to more families.

Maryland was one of the first states to enact a state EITC. Initially, the credit was set at 50 percent of the federal credit and was nonrefundable. Because the state had a poverty income deduction in effect, the tax credit was only benefiting those low-income workers who were above the poverty line.

State legislators realized that offering a refund could also benefit very low-income working families with no tax liability. In addition, the Governor’s Commission on Welfare Policy had recommended enactment of a refundable credit. In 1998, legislation was enacted making 10 percent of the state EITC refundable. This rate will gradually increase to 15 percent during the next few years. The decision to offer a state refund of 10 percent to 15 percent was based primarily on cost. In 1998, the refundable portion of the state EITC, which is counted as part of the MOE, was $19.9 million. Under current law, it will increase to $29.4 million for tax year 2001. Contact: Richard Larson, 410/767-7150. In addition, the state routinely sends state EITC checks to families that claim the federal tax but fail to claim the refundable portion of the state tax. More than 12,000 state residents benefited from this practice last year. Contact: Jim Arnie, 410/260-7445.

States need to consider two other issues in designing a state tax credit. These are whether low-income families without children will be eligible for the credit and whether the credit should be adjusted to account for family size. Wages do not adjust for family size, so larger low-income families have a more difficult time meeting basic living expenses. Adjusting a state EITC for family size beyond the current federal adjustment (two or more children) helps larger families meet living expenses. Wisconsin is the only state that varies the percentage level of its credit on the basis of family size, rather than just using a flat percentage of the federal credit. The refundable credit, which has been in effect since 1989, ranges from 4 percent of the federal credit for families with one child, to 14 percent for families with two children, to 43 percent for families with three or more children. Wisconsin legislators recognized that low-wage workers with larger families needed more assistance, and they targeted the credit to address this need. In tax year 1998, 20 percent of the families that claimed the credit had three or more children and received nearly 60 percent of the benefits paid. Contact: John Peacock 608/284-0580, ext. 307.

Prior to 1998, Minnesota’s refundable credit, the Working Family Credit (WFC), was set at 15 percent of the federal EITC. The WFC was scheduled to increase to 25 percent of the EITC for families with children for the 1998 tax year. However, the 1998 legislature made changes to the structure of the credit to address the problem of marginal tax rates for low-income families. Problems were particularly severe for families participating in the state’s TANF program with earnings of more than $6.00 per hour. At this level, families of average size working full time would see their TANF grant and federal EITC decrease. Concurrently, their federal payroll contributions, and their federal and state income taxes, would increase, resulting in a net loss of income for many welfare families. To address this problem, beginning with tax year 1998, the WFC is calculated based on a percentage of earned income, rather than a percentage of the federal EITC. The revised WFC provides a larger credit to families whose EITCs are decreasing, helping to address the problem of high marginal tax rates. An additional increase to the WFC in 1999 raised credits by an average of 10 percent. The 1999 increase also allowed Minnesota’s low-income families to share in the state’s tax cuts enacted that year. For the 1999 tax year, the WFC remains at 15 percent for workers who do not have children. For families with children, it ranges from 22 percent to 46 percent of the federal EITC, depending on earned income and family size. Contact: Nan Madden, 651/642-1904.

States also need to determine whether to assist workers without qualifying children. Although such workers generally receive a minimal refund and, therefore, may not be inclined to claim the credit, states may decide that the costs incurred in excluding these workers may not be worth the expense. For instance, excluding these workers requires additional instructions on state tax forms and an increase in the number of returns processed. Currently, only two states, Maryland and Wisconsin, exclude workers without qualifying children from their refundable EITCs.

Localities may also enact EITCs. To date, only Montgomery County, Maryland, has done so. Like their state counterparts, county officials believe that this wage supplement supports efforts to make work pay and enables low-income working families to meet basic living expenses. The Working Families Income Supplement credit is equal to the state refundable credit, which is currently 10 percent of the federal EITC. The county chose to have its credit parallel the state credit for practical administrative reasons. As the state’s refundable portion of the credit increases, the county’s will increase accordingly. Although the county has the option to count the refundable portion of the credit toward the MOE, per the federal regulations, the state TANF plan must be amended to do so. To date, state officials have not submitted an amendment.

The legislation, passed in October 1999, is expected to provide more than 12,000 county taxpayers with a credit of up to $400, with an average credit of $176 for a family of four. The average refund is expected to grow to $332 during the next two years and apply to 13,600 families making less than $19,000 per year as the refund increases from 10 percent to 15 percent of the federal refund. Contact: Essie McGuire, 240/777-7813.

For detailed information on the credits enacted by each of the states, see the various CBPP publications listed below, in particular, Johnson, 1999.

What is the impact of a state EITC on TANF and MOE expenditures? According to Johnson, 1999, the cost of a state EITC depends on four factors: the number of families that claim the federal credit, the percentage of the federal credit at which the state credit is set, whether the credit is refundable, and the number of state residents who receive the federal credit and claim the state credit. In 1996, costs to the states ranged from $12 million in Vermont to $291 million in New York.

Federal TANF rules implementing the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) allow only the refundable portion of a state EITC to be funded with federal TANF funds or MOE funds. Even though the credit is available to all low-income state residents, not just TANF recipients, states can still finance the refundable portion of the EITC with TANF or MOE funds. However, only that portion of an EITC that provides a refund in excess of tax liability can be counted. Federal time limits and other restrictions on cash assistance under TANF do not apply because the EITC is not considered assistance as defined in the final TANF regulations. Consequently, states with large amounts of unspent TANF block grants or unused MOE funds may want to consider financing a refundable credit with TANF or MOE funds.

State EITCs that are nonrefundable cannot be financed with federal funds and cannot count toward MOE expenditures. In 1998, Virginia passed legislation to create a nonrefundable credit that counted the expense as part of the state MOE. Implementation of the legislation depended on certification by the U.S. Department of Health and Human Services (DHHS) that the expense can be counted in such a way. Although the state claimed the expense as a liability, DHHS did not issue a certification based on the grounds that a nonrefundable credit is not considered to be an expenditure under TANF regulations. Contact: Tom Steinhauser, 804/692-1703.

Research Findings

Many proponents of the EITC cite research indicating that the credit considerably increases the work effort among single mothers. Meyer and Rosenbaum (1999) and Acs et al. (1998) found that even prior to welfare reform, the number of single mothers with children in the workforce rose significantly with the expansion of the EITC. Between 1984 and 1986, expansions in the EITC increased more than 15 times, and nearly two-thirds of these EITC dollars were claimed by single mothers. Families that benefited the most from claiming the tax were those at or near the poverty line. Meyer and Rosenbaum found that the EITC accounted for a nearly 40-percent increase in weekly employment by single mothers and 57 percent of the annual employment increase during the same period.

The increase in the number of working single mothers has, in turn, contributed to a decline in child poverty. A report by the Council of Economic Advisers (1998) notes that more than half the decline in child poverty between 1993 and 1997 is accounted for by changes in taxes, primarily the EITC. These changes have occurred as many states have sought to restructure their welfare programs to encourage welfare recipients to work by imposing work requirements, time limits on assistance, and other measures. Acs et al. (1998) found that the benefits of the EITC might encourage families to seek work sooner than later in an effort to reserve future TANF benefits.

The majority of those claiming the federal EITC choose to receive the credit as a lump-sum payment, and many view it as a kind of "forced savings." Because it is received as a refund, it is likely to be used differently than if it were received on a monthly basis. Smeeding et al. (1999) found that although nearly half of those interviewed intended to use the refund to make ends meet, 49 percent said they would save some or part of the money. In addition, 16 percent planned to use the refund to pay for tuition, and 22 percent planned to use the funds to cover car-related expenses. These findings indicate that recipients of the EITC understand the need for self-sufficiency, and use the funds to further secure their self-sufficiency, one of the major goals of welfare reform. Smeeding also found that the closer workers’ income came to the phase-out range (where earnings exceed the qualifying amount), the more likely they are to use the funds to ensure long-term self-sufficiency and allow for asset-building.

Barrow and McGranahan (1999) also found a significant increase in spending on the purchase of durable goods by recipients of the EITC refund, especially during the month of highest refund. However, their findings indicate that only between 10 percent and 12 percent of the refund is used for this purpose. They suggest that the average EITC household may be better off in opting for the advance payment. Because this option allows employers to remit only up to 60 percent of the total credit as a supplement to pay, recipients can still use the nonadvance portion as savings. Future policy changes that take recipients’ concerns regarding advance payment into account may result in an increase in its use.

One drawback to the credit as it currently stands is the impact of the marriage penalty on low-income married couples. Until 1994, the EITC was available only to taxpayers if they resided with children for more than half the year. The amount of the credit did not vary with the number of children in the family. This had two consequences. It could result in a significant bonus when a childless worker married a nonworker with children, or it could create a penalty for low-income workers with children who marry. If someone is already receiving the maximum credit and he or she marries, and the number of children they have does not change, but their combined income rises, their credit declines.

Questions have also been raised about compliance. Liebman (1999) notes that the overpayment rate for the EITC is more than three times that of Aid to Families with Dependent Children. His research indicates, however, that about half of the claims made in error were made by noncustodial parents or as false child claims. The remainder were a result of misunderstanding over which adult in a household was eligible to claim children for purposes of the EITC. A 1999 study by McCubbin of noncompliance found that the probability that an ineligible taxpayer claims an EITC qualifying child increases with the size of the credit. She estimates that $4.4 billion was claimed inappropriately during the study period, primarily due to misrepresentation of the number of qualifying children in a qualifying household. Failure to meet the residency test was the most important qualifying child error. She suggests that although a small reduction of the credit would make up the losses, many compliant taxpayers would loose a portion of their refunds. She recommends that the IRS seek to improve enforcement activities as an alternative. McCubbin adds that laws passed since 1994, including PRWORA, which require that more information be provided to the IRS, and the collection of additional information with which to evaluate the accuracy of EITC claims, should result in a reduction in noncompliance.

Innovative Practices

In Chicago, Illinois, the mayor’s office recently launched a program to encourage businesses to assist employees in claiming the federal EITC. The campaign is being conducted by a partnership involving the city of Chicago, the Chicagoland Chamber of Commerce, the Chicago Partnership for Economic Development, and several foundations. Outreach activities include notices on grocery bags, flyers in utility bills, and ads on public transportation vehicles. In addition, the city, its sister agencies, and many private employers publicize the program on paycheck stubs. It is estimated that up to $100 million could be claimed if every eligible person claimed the credit. Contact: Rod Sierra 312/744-3334.

The Tax Counseling Project is one of two community-based organizations chosen to participate in the Chicago mayor’s program. The project has advertised the EITC by including inserts in the W-2 forms mailed to more than 80,000 city workers and in the foster parent handbook distributed statewide, as well as through presentations at state and city agencies designed to educate staff and clients about the EITC. In addition, staff have appeared on local radio and television shows to discuss the credit. In the two months since the outreach campaign was implemented, the number of calls for tax assistance coming into the project has nearly doubled. Contact: Efrain Soto, 312/341-1666.

The Earned Income Tax Credit Campaign Partnership, sponsored by the IRS, the city of Los Angeles, and the county of Los Angeles, began in 1998 in response to a city-commissioned study on the living wage. The study found that more than half of the county residents who were eligible to claim the EITC were not receiving the credit and, as a result, county residents were loosing nearly $200 million in revenues. The main focus of the campaign is the distribution of EITC information through community-based organizations with large constituencies in Los Angeles County. Information is disseminated through the media, by placing notices in agency paychecks and on public transportation vehicles, and via a year-round bilingual hotline. As a result of staff training provided by the campaign, a division of the Community Development Department and the Department of Public Social Services (DPSS) make information available on a routine basis to clients and employers. The county also includes an EITC dissemination clause in contracts signed with local businesses, requiring them to inform employees about the credit. The partnership has grown to include more than 400 organizations and agencies. In the two years since it began, usage of the hotline has increased by 48 percent. Contact: Deborah Guarjardo, 213/847-3261.

The Minnesota Working Family Tax Credit Program seeks to inform eligible working families about both the federal credit and Minnesota’s Working Family Credit. The program is a cooperative effort of the University of Minnesota’s Office of Families that Work in the College of Human Ecology, the Minnesota Department of Revenue, the Internal Revenue Service, and several community-based organizations. The Minnesota Working Family Tax Credit Coordinating Committee operates under the belief that information provided by community-based organizations is received by audiences differently than information sent out by the IRS or state revenue department. The annual outreach campaign provides tax credit information to eligible audiences through various marketing mediums, including radio, television, and print, and through multilingual outreach. Contact: Elizabeth Sandell, 612/625-8260.

The New Hope Project in Milwaukee, Wisconsin, operated between 1994 and 1998. The program was based on the principles that those who are willing to work should have the opportunity to do so, that those who work full time should not be poor, that people who work more hours should have more take-home pay, and that working should make one better off than those on welfare alone. The program was open to all low-income workers, not just welfare recipients. To be eligible, participants had to work at least 30 hours per week. Participants received an earnings supplement check, health insurance, and child care subsidies. They also qualified for both the federal and state EITC. The EITC was a significant source of additional income for New Hope families, especially after the 1994–1997 expansion. Among the lessons learned about the utilization of the credit were: most low-wage workers preferred to receive the refund as a lump-sum payment at the end of the year, even after hearing about the advance payment option; workers were often unclear about what the EITC was and its relationship to their work effort, knowing only that they received a refund after filing tax forms; and ongoing education of both staff and participants was necessary, because the amount of the credit changed year to year, and staff often felt nervous about explaining anything that had to do with the IRS or taxes. However the staff coaching role in explaining the tax credit and the two payment options was critical in helping more people receive the credit. Contact: Julie Kerksick, 414/267-6020 or

The New Jersey Department of Human Services (DHS), in partnership with the Association for the Children of New Jersey and Public Service Electric and Gas, uses a three-pronged approach to promote the federal EITC. Informational mailings are conducted twice yearly to public and private associations, including many faith-based organizations. In addition, media outreach is conducted at the state and local levels, and training is provided to agency, nonprofit, and business staff who serve or employ individuals who may be eligible for the credit. DHS intends to use similar methods to advertise the proposed state EITC when it becomes law.

New Jersey’s governor recently proposed a state EITC as part of her 2001 budget. The refundable credit is targeted to low-income working families and families making the transition from welfare to work. The credit will initially be equal to 10 percent of the federal credit. The percentage basis will increase over four years to 20 percent. Nearly 200,000 working families that receive the federal EITC will be eligible for the state credit. The average range of the state tax credit will be between $114 and $394 per family in tax year 2000, rising to between $238 and $823 per family in tax year 2003, when the program is fully phased in. The New Jersey EITC will not be counted as income in determining eligibility for state public assistance. However, as under the federal EITC, the refund will be counted as a resource in determining eligibility for federal public assistance if it is not spent within a month of its receipt. Also, if it is not spent within 12 months of receipt the refund can be counted as a resource in determining food stamp eligibility. Contact: Steve Valli, 609/292-4750.

In Washington State, a 1998 survey found that less than half of workers moving off public assistance reported receiving the EITC. To increase participation, the governor’s office developed an outreach program for tax year 1998 that was funded with $500,000 in state savings from the decline in TANF caseloads. This year, federal TANF funds from the caseload reductions will be used to fund the program. In 1999, the state began an aggressive marketing campaign that publicized the credit through paid media advertisements. A toll-free hotline was established for workers to call year-round to receive forms and assistance. Permanent banners with the hotline’s number are now visible at welfare offices throughout the state, and caseworkers now show clients how much they may receive from the EITC. Hotline staff provide callers with eligibility information, send them the appropriate tax forms, and refer them to free tax assistance. They also conduct ongoing outreach to former TANF recipients who are currently working, and encourage employers to provide workers with information about the EITC advance payment option.

As a result of the campaign, Washington had the largest increase in filers for the federal EITC in the nation for tax year 1999. Filings among TANF exiters increased by 67 percent. The credit brought $436 million into the state, $348 million of which was in the form of cash refunds to families. Contact: Jo Ann Hairston, 1-800/755-5317.

Resource Contacts

American Public Human Services Association, contact John Sciamanna, 202/682-0100.

Annie E. Casey Foundation, "Making Wages Work." This web site encourages discussion of policies and programs that supplement income and wages in order to help families escape poverty and avoid welfare dependency. It serves a variety of audiences who share an interest in exploring ways that income supplements can "make wages work and work pay."

Association for Children of New Jersey, contact Jeanette Russo, 973/643-3827.

Center on Budget and Policy Priorities, Earned Income Tax Credit Campaign, contact John Wancheck for information about outreach programs relating to federal and state EITCs, and Nicholas Johnson for information about the enactment and implementation of state EITCs, 202/408-1080.

Economic Policy Institute, contact Jared Bernstein, 202/775-8810.

Illinois Department of Revenue, Office of Policy and Communications, contact Mike Klemens, 217/782-3128.

Indiana Family and Social Services Administration, contact Char Burkett-Sims, 317/232-4903.

Internal Revenue Service, National Program for the Earned Income Tax Credit, contact Candice Cromling, National Program Manager, 202/622-5994.

Minnesota Council of Nonprofits, contact Nan Madden, Minnesota Budget Project Director, 651/642-1904.

National Governors’ Association, contact Susan Golonka or Rebecca Brown, 202/624-5300.

U.S. Department of Health and Human Services, Administration for Children and Families, Office of Family Assistance, Technical Assistance Branch, contact Paul F. Maiers, 202/401-5438.

U.S. Department of the Treasury, Office of Tax Analysis, contact Janet Holtzblatt, 202/622-1327.

University of Minnesota, College of Human Ecology, contact Elizabeth Sandell, 612/625-7272.

Wisconsin Council on Children and Families, contact John Peacock, 608/284-0580, ext. 307.

Publications

Acs, Gregory, Norma Coe, Keith Watson, and Robert Lerman. Does Work Pay? Analysis of the Work Incentives under TANF. Washington, D.C.: Urban Institute, July 1998.

Association for Children of New Jersey. Working but Poor in New Jersey. Newark, N.J.: Association for Children of New Jersey, 1999.

Barrow, Lisa, and Leslie McGranahan. The Earned Income Credit and Durable Goods Purchases. Prepared for a conference of the Joint Center for Poverty Research, "The Earned Income Tax Credit: Early Evidence," Evanston, Ill., October 1999.

Center on Budget and Policy Priorities. EIC 2000 Earned Income Credit Campaign Outreach Kit. Washington, D.C.: Center on Budget and Policy Priorities, 2000.

Council of Economic Advisers.Good News for Low-Income Families: Expansions in the Earned Income Tax Credit and the Minimum Wage. Washington, D.C.: Council of Economic Advisers, December 1998.

Ellwood, David T. The Impact of the Earned Income Tax Credit and Social Policy Reforms on Work, Marriage, and Living Arrangements. Prepared for a conference of the Joint Center for Poverty Research, "The Earned Income Tax Credit: Early Evidence," Evanston, Ill., October 1999.

Greenstein, Robert. Should Benefits be Enlarged for Families with Three or More Children? Washington, D.C.: Center on Budget and Policy Priorities, March 14, 2000.

Greenstein, Robert, and Isaac Shapiro. New Research Findings on the Effects of the Earned Income Tax Credit. Washington, D.C.: Center on Budget and Policy Priorities, March 11, 1998.

Holtzblatt, Janet, and Robert Rebelein. Measuring the Effect of the EITC on Marriage Penalties and Bonuses. Prepared for a conference of the Joint Center for Poverty Research, "The Earned Income Tax Credit: Early Evidence," Evanston, Ill., October 1999.

Johnson, Nicholas. A Hand Up: How State Earned Income Credits Help Working Families Escape Poverty, 1999 Edition. Washington, D.C.: Center on Budget and Policy Priorities, December 20, 1999.

Johnson, Nicholas. Estimating the Cost of a State Earned Income Tax Credit. Washington, D.C.: Center on Budget and Policy Priorities, November 11, 1999.

Liebman, Jeffrey B. Who Are the Ineligible EITC Recipients? Prepared for a conference of the Joint Center for Policy Research, "The Earned Income Tax Credit: Early Evidence," Evanston, Ill., October 1999.

McCubbin, Janet. EITC Noncompliance: The Misreporting of Children and the Size of the EITC. U.S. Department of the Treasury, Office of Tax Analysis. Prepared for a conference of the Joint Center for Poverty Research, "The Earned Income Tax Credit: Early Evidence," Evanston, Ill., October 1999.

Meyer, Bruce D., and Dan T. Rosenbaum. Making Single Mothers Work: Recent Tax and Welfare Policy and Its Effects. Working Paper No. W7491. Cambridge, Mass.: National Bureau of Economic Research, January 2000. Prepared for a conference of the Joint Center for Policy Research, "The Earned Income Tax Credit: Early Evidence," Evanston, Ill., October 1999.

Neumark, David, and William Wascher. Using the EITC to Help Poor Families: New Evidence and a Comparison with the Minimum Wage. Working Paper No. W7599. Cambridge, Mass.: National Bureau of Economic Research, March 2000.

Romich, Jennifer L., and Thomas Weissner. Earnings, Refund, Windfall or Equity: How Families View and Use the EITC. JCPR Working Paper 138. Prepared for a conference of the Joint Center for Poverty Research, "The Earned Income Tax Credit: Early Evidence," Evanston, Ill., October 1999.

Schott, Liz, Ed Lazere, Heidi Goldberg, and Eileen Sweeney. Highlights of the Final TANF Regulations. Washington, D.C.: Center on Budget and Policy Priorities, Apri1 1999.

Smeeding, Timothy M., Katherine E. Ross, and Michael O’Connor. The Economic Impact of the Earned Income Tax Credit (EITC): Consumption, Savings and Debt. Syracuse, N.Y.: Syracuse University, Center for Policy Research, October 1999.

Sweeney, Eileen, Liz Schott, Ed Lazere, Shawn Frenstad, Heidi Goldberg, Jocelyn Guyer, David Super, and Clifford Johnson. Windows of Opportunity: Strategies to Support Families Receiving Welfare and Other Low-Income Families in the Next Stage of Welfare Reform. Washington, D.C.: Center on Budget and Policy Priorities, January 2000.

U.S. Department of Health and Human Services, Administration for Children and Families. "Temporary Assistance for Needy Families Program (TANF) Final Rule." Federal Register 64, no. 69 (April 12, 1999): 17719–68. Visit http://gpo.lib.purdue.edu, and click on "Search GPO Access."

Ventry, Dennis J. Jr. The Collision of Tax and Welfare Politics: The Political History of the Earned Income Tax Credit, 1969–1999, Evanston, Ill.: Joint Center for Poverty Research, 1999.

The Welfare Information Network is supported by grants from the Annie E. Casey Foundation, the Charles Stewart Mott Foundation, the David and Lucile Packard Foundation, the Edna McConnell Clark Foundation, the Ford Foundation, the Woods Fund of Chicago, the McKnight Foundation, the Administration for Children and Families, U.S. Department of Health and Human Services, and the U.S. Department of Labor

Welfare Information Network - Barry L. Van Lare, Executive Director - website: www.welfareinfo.org (202) 628-5790