Rural and suburban communities are often the major beneficiaries of tax credits designed for low-income, working families.
The most common of these benefits is the Earned Income Tax Credit (EITC). 

These recent findings challenge popular assumptions that low-income families are primarily located in inner-city neighborhoods.

?The EITC makes a significant difference to low-income working families and the neighborhoods in which they live,? said Alan Berube, senior research analyst at the Brookings Institution which reported the findings, ?whether those neighborhoods are in the suburbs, smaller cities or the rural countryside.? 

?This research demonstrates that EITC-eligible families are not geographically isolated but represent a significant portion of the workforce,? says Ralph Smith, senior vice president of the Anne E. Casey Foundation, which sponsored a briefing to announce the research. 

Key findings of the research include the following:
? Between tax years 2000 and 2002, there was an 8 percent increase in the number of families nationwide claiming the EITC.
? EITC filers outside of large cities outnumbered their urban counterparts 14.3 million to 4.6 million.
? $8 billion in EITC funds flowed into large cities, compared to $24.1 billion distributed to the suburbs and beyond.

The EITC is considered the largest and most successful anti-poverty program in history.  First enacted in 1975, this tax credit can contribute a substantial amount of money to low-income families. 

For example, in tax year 2003, qualified workers who are raising more than one child, with a family income of less than $33,692 (or $34,692 for married workers), can claim an EITC of up to $4,204.

"State and local governments nationwide, and especially in the South, can take a number of steps to build on the federal EITC to help more families access and use the credit to begin building assets," Berube said.

NLC?s action kit on ?Helping Working Families? focuses on outreach steps that city officials can take to assist low-income working families in benefiting not only from EITC, but also from the Child Health Insurance Program and Food Stamps. 

This action kit can be downloaded for free at www.nlc.org/iyef. Or, to request a copy, contact Abby Hughes Holsclaw at holsclaw@nlc.org or at 202-626-3107.

The full Brookings report, "The 'State' of Low-Wage Workers: How the EITC Benefits Urban and Rural Communities in the 50 States," is available online at www.brookings.edu.urban.

The National Community Tax Coalition hosts an informational website at www.tax-coalition.org that includes background information on the EITC, downloadable templates and resources to assist with starting an EITC campaign, links to advocacy efforts and a listing of free tax preparation programs in each state.

Examples of Benefit Outreach Efforts

Riverside, California
The city of Riverside has launched a Family Financial Asset Building Program comprised of a coalition of volunteers from neighborhoods, the business community, non-profit organizations and the educational community. This first-year coalition is reaching out to residents to educate them about tax credits and provide free tax preparation services to low- and moderate-income families. The city sponsors a website listing free tax preparation sites and offering information on asset building programs (e.g., financial literacy workshops and special savings accounts).

Tulsa, Oklahoma
In Tulsa, the city council invests close to $80,000 a year of Community Development Block Grant funds in Earned Income Tax Credit (EITC) outreach efforts, including public education and access to free tax preparation services.  The EITC campaign, run by the Community Action Project of Tulsa County, provides nearly a 200-fold return on investment by bringing $14 million a year in federal tax refunds into the community. Tulsa has recently expanded its efforts to include online benefit calculators at free tax preparation sites to screen filers for other benefits such as food stamps and free or low-cost health care.

Hattiesburg, Mississippi
After learning that approximately $5 million was not being claimed by EITC eligible tax filers, Hattiesburg Mayor Johnny DuPree organized a city-wide initiative ? the Mayor?s Financial Education Initiative ? to educate families about the credit and provide free tax assistance. City councilmembers and staff have conducted radio interviews, issued news releases, appeared on TV, and spoken to neighborhood associations, and distributed pamphlets to businesses, schools and churches.

Burlington, Vermont
Through the leadership of Mayor Peter Clavelle, Burlington produces an annual brochure and newsletter that includes information to residents on food assistance, housing programs, tax credits, health insurance, fuel assistance, and general aid for families in need. The city has produced these informational pieces for the past four years in part to celebrate Martin Luther King Day and the holiday's call to a day of
service.