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Help for the working poor.

We will reward the work of millions of working poor Americans by realizing the principle that if you work 40 hours a week and you've got a child in the house, you will no longer be in poverty.

President Clinton, State of the Union Address, Feb. 18, 1993

There are some 5 million people in America who are the working poor. They have full-time jobs, they are between the ages of 20 and 64, and their earnings place them below the poverty level.

The Earned Income Tax Credit was enacted in 1975 to offset the impact of Social Security and Medicare taxes on low-income individuals and to encourage them to work instead of relying on welfare benefits. Originally, a family could receive no more than $400 under the plan. Today, the credit has been expanded, and for the first time ever the EITC will be available to families without children. The General Accounting Office predicts that in 1994 the average credit will be slightly more than $1,000.

Some 10 percent to 20 percent of those eligible for the credit fail to file a "Schedule EITC" with their Form 1040 or Form 1040A. The IRS has a national outreach program to educate low-income taxpayers about the credit. They can choose to receive an advance credit that is paid by their employers as part of their regular salary.

The state of Washington requires agencies to include notices about the EITC to past and present social services recipients. Similar legislation has been proposed in Maryland and Texas. Legislators in New York have conducted press conferences on the EITC, and in Wisconsin EITC information is printed on the back of lottery tickets.

Six states--Iowa, Maryland, Minnesota, Rhode Island, Vermont and Wisconsin--have established their own EITCs. For further information, call the NCSL Marketing Department (303) 830-2200 for the State-Federal Issue Brief, The Earned Income Tax Credit.

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COPYRIGHT 1994 National Conference of State Legislatures
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Title Annotation:Statestats; Earned Income Tax Credit programs for low-income individuals in various states
Publication:State Legislatures
Date:Jan 1, 1994
Words:315
Previous Article:Federalism times four.
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