Georgia's Rural Earned Income Tax Credit Initiative

Result areas:
Stable Self-Sufficient Families

Family Connection Partnership and the Annie E. Casey Foundation are participating in a rural Earned Income Tax Credit Initiative, a pilot program to lift working rural families and individuals eligible for the federal Earned Income Tax Credit (EITC) in three Georgia counties out of poverty. This initiative coordinates services designed to:

• Preserve the value of the EITC by providing and supporting free tax filing assistance.
  
  
• Provide outreach and education about the EITC benefits and access to free tax preparation sites.
  
  
• Develop activities that assist individuals in building personal assets to include: linking working individuals and families with financial institutions; providing training in financial literacy; assisting with setting financial goals for education and training; and moving individuals towards home ownership.
  
  
• Stimulate the local economy with the strengthened purchasing and saving power of families and individuals benefiting from the EITC.

Three Family Connection county collaboratives - Baker, Greene, and Warren - participate in the EITC project. In addition to providing the above services, each county has committed to:

• Substantially increase the number of individuals benefiting from the EITC.
  
• Preserve the value of the EITC by developing and supporting free tax preparation sites to assist low and moderate income individuals.
  
• Develop and provide services that link working individuals and families with financial institutions and provide banking services for families who have none.

Georgia's work with the Annie E. Casey Foundation is part of a larger national initiative - the Casey Foundation's National Tax Assistance Campaign for Working Families. Georgia's pilot rural counties will have the opportunity to use the national logo, have access to and use of Casey's national marketing materials, and receive technical assistance regarding the use of the marketing materials and data collection.

EITC Description

The Federal Earned Income Tax Credit (EITC) is a federal tax benefit designed to help low-income workers increase their financial stability. Workers who qualify for EITC receive a tax refund. Federal EITC eligible workers in Georgia may include janitors, security guards, school bus drivers, pre-school teachers, dental assistants, cooks, graphic designers and receptionists, to name a few. EITC has several important purposes:

• Reduce taxes for these workers.
  
• Supplement wages.
  
• Make work more attractive than welfare.

Data from the U.S. Census Bureau, Current Population Survey, indicate that:

• In 1999, the earned income credit (EIC) lifted 4.7 million people above the federal poverty line - including 2.6 million children of low-income workers.
  
• In 2000, more than 19.2 million working families and individuals received the credit.

Benefits
According to the U.S. Department of Treasury, this credit benefits:

• Working families with children. American children more than any other age group are likely to be poor. Working families with two or more children benefit most.
  
  
• Low-income workers, even if they do not have a qualifying child. Receiving a financial boost are those people who work at very low wages or find only part-time work.
  
  
• State and local economies. This credit is an economic development tool for low-income neighborhoods. In the first eight months of 2001, nearly $31 billion in federal EITC funds flowed into the states. Most funds are spent locally. Increasing the income of low-wage earners can reduce the demand for some public services and benefit programs provided by state and local governments.

To learn more about this credit's benefits and its implications for Georgia, see EITC Impact in Georgia and the Nation.

The three counties involved in the initiative shared their experiences with their peers at the Family Connection Biennial conference in October 2003. For more information, please read "Addressing the Goals of Economically Self-sufficient Families".

Role of Family Connection Partnership

Family Connection county collaboratives already work on issues affecting at risk children and families and develop strategic plans with goals to improve results in five areas - "Self-Sufficient Families" is one of these. Expanding awareness of the federal Earned Income Tax Credit among eligible families and individuals, helping low-income families preserve the value of the EITC by providing or supporting free tax filing assistance, and developing activities that assist individuals in building personal assets can be an essential part of addressing this goal area.

Family Connection Partnership provides support to the counties operating the pilot programs and has organized and staffed a state-level technical advisory committee. In November 2002 the Partnership organized and handled all logistics and operations for a Casey Learning Exchange designed to familiarize participants from Georgia, Maryland, North Carolina and South Carolina with the EITC and the role that Casey Foundation is playing nationally.

Related Links

The Annie E. Casey Foundation
For information on THE ADVOCASEY INDEX: Making Work Pay: Tax Credits for Low-Income Working Families. www.aecf.org/

Internal Revenue Service
For information on the tax credit and current tax law changes. www.irs.gov/individuals

Contact Information