SD30 - Developing Procedures for Notifying Citizens of the Commonwealth of Their Eligibility for the Federal Earned Income Tax Credit

  • Published: 1993
  • Author: Department of Taxation
  • Enabling Authority: Senate Joint Resolution 70 (Regular Session, 1992)

Executive Summary:
Senate Joint Resolution No. 70 of the 1992 Session of the General Assembly requested that the Department of Taxation (TAX) develop procedures for notifying citizens of the Commonwealth of their eligibility for the Federal Earned Income Tax Credit (EIC). A copy of the resolution may be found in Appendix A.

The EIC is intended to provide tax relief to certain low-income working individuals with children. The credit is refundable, thus qualifying individuals can receive a refund check even if they do not have a federal liability. Many low-income individuals who qualify for the federal credit fail to file the necessary form to receive the credit. This failure often occurs because of the misconception that an individual must have a tax liability to claim the EIC.

TAX, in conjunction with the Department of Social Services (DSS), formed a steering committee to assist with this project. Several steering committee meetings were held to solicit ideas for ways to communicate EIC information to low-income families. As a result, a plan has been developed and will be implemented for the upcoming filing season that emphasizes channeling resources and materials to those low-income families most likely to qualify for the EIC. In addition, emphasis is placed on conducting these activities at a minimal cost to the Commonwealth and to the organizations which volunteered through the steering committee to assist in notifying citizens of their eligibility for the EIC.

The steering committee found that an effective network of agencies and organizations already exists to channel information on the EIC to potential recipients. As such, a broad media advertising campaign is not recommended. Rather, it is felt that the most effective efforts will be those that are targeted toward specific groups of individuals who are likely to qualify for the EIC, such as WIC (Women, Infant & Children) supplemental feeding program recipients and Aid to Families with Dependent Children (AFDC) recipients.

Through special efforts, IRS was able to procure a sufficient number of materials on the EIC to reach several such target groups in 1993, and TAX will serve as a clearinghouse for these materials. However, the number was not sufficient for all requests by interested agencies and organizations to be honored. Nonetheless, many of these agencies and organizations, such as Virginia Power and the Virginia Council of Higher Education, have volunteered to conduct their own outreach programs.

These targeted programs will be augmented by low-cost or no-cost broad-based outreach efforts that will reach individuals who qualify for the EIC. The key to these efforts is a program to increase the media's awareness and coverage of the EIC during the upcoming tax filing season. This effort will include a news conference, news releases, and participation in television and radio programming (talk shows, call-in programs, etc.). In addition, information on the EIC will be included in the Virginia individual income tax packet, which reaches 2.2 million individuals, and EIC information will be provided to all state employees.

The steering committee plans to stay in existence at least through 1993 in order to evaluate the effectiveness of the various outreach efforts and recommend possible future programs. To the extent that IRS may be unable to provide sufficient EIC materials in future years, minimal funding (thought to be less than $25,000) would be helpful for the printing of materials for future EIC outreach and maintenance efforts by interested agencies and organizations.

In addition, during 1993, the steering committee can explore with Virginia broadcasters the feasibility of creating a low-cost, yet effective, public service advertising campaign.