Outreach goals

Why promote the EIC and other tax credits for low-income families?

	The EIC is the most effective anti-poverty program for families with children. In 1998, the federal EIC removed 4.8 million U.S. citizens -- more than half of them children -- from poverty.
	The federal and state EIC are pro-family and pro-work. These credits reward people who find and keep a job by adding to the wages they earn. The combined federal and state EIC can provide over $6000, and can increase income by as much as 57%.
	Federal and State EIC refunds infuse substantial amounts into the local economy. The federal EIC brought over $365 million to Wisconsin taxpayers in 1998, and the Wisconsin EIC provided another $59.9 million dollars. Most recipients use their EIC refunds to pay bills or buy locally. EIC dollars spent locally are an important source of economic development, particularly in lower-income areas.

What are the goals of a tax credit outreach campaign?

Increase use of tax credits among eligible families

Many who are eligible for these tax credits aren't getting them - either because they haven't heard of them, don't know they are eligible, or don't know how to apply. Recent research from the Urban Institute shows that, nationwide, about two-thirds of families have heard of the EIC. Knowledge and use of the EIC are lower among low-income Hispanics, very poor parents, and current welfare and Food Stamp participants.

Beginning in 2001, millions more low-income families qualify for the Child Tax Credit. In the past, this credit was not refundable for most families. Many low-income families do not owe any taxes, and therefore could not benefit from the credit. The credit is now partially refundable for families with earned income over $11,750, bringing hundreds of additional dollars in refund checks to eligible families.

Resources to promote tax credits

Strategies for outreach

Encourage families to file back claims for tax credits for past years

The EIC can be claimed for up to three years, and the Homestead Credit can be claimed for up to five years. Families who missed out in the past can collect substantial amounts by filing retroactively.

Filing back claims for the Homestead Credit

Encourage families to seek free tax assistance

Many people who know about these tax credits need help in claiming them. Free tax assistance for low income filers is available in many counties, but is not widely used. Outreach efforts to promote use of tax credits will be most effective if combined with information about locating and using free tax assistance.

One option is the Volunteer Income Tax Assistance Program, or VITA. VITA sites are staffed by IRS-trained volunteers who can help fill out tax forms and answer questions.

Taxpayer Counseling for the Elderly (TCE) provides free tax assistance for the elderly, as well as for persons eligible for the Earned Income Credit or the Homestead Credit.

Follow this link for hours and locations for VITA sites or hours and locations for TCE sites. For more information on VITA sites, call the IRS Taxpayer Education Office at (414) 297-3376. Information on TCE sites is also available by phone from the AARP at 1-888-227-7669.

Let workers and employers know about the advance payment option for the federal EIC

The advance payment option for the federal EIC allows workers to increase their take-home pay by getting a portion of their EIC in their regular paycheck. This can increase monthly pay by up to $127 per month, providing extra money for child care, food, or other expenses. A higher take-home pay can help employers by promoting job stability. Despite these advantages, many workers and employers do not understand the advance payment option. Workers who expect to qualify for the EIC can get the advance credit simply by filling out a W-5 form. There is no cost to employers -- they simply reduce the taxes they would otherwise send to the federal government -- and they are not responsible for verifying eligibility.

Outreach flyer on the advance EIC

Tax information for employers (includes information on providing the Advance EIC to employees).

Cooperative Extension

Page author: Judi Bartfeld (bartfeld@facstaff.wisc.edu)

Last modified on 01/28/08