Using a panel of 4,500 children matched to their mothers from National Longitudinal Survey of Youth datasets, authors analyze the impact of a family’s income on child achievement to understand possible causal effects an increase in family income, such as through the Earned Income Tax Credit (EITC). Specifically, a $1,000 increase in income is shown to equate to child gains in reading and math test scores, and the increase in scores is larger for children in more disadvantaged families.

Work supports such as the Earned Income Tax Credit, child care subsidies, and public health insurance can often help low-income working families reach self-sufficiency. Using the National Center for Children in Poverty’s Family Resource Simulator and Basic Needs Budget Calculator, authors provide an overview of the cost of living in North Dakota, which demonstrates the importance of work supports in helping low-income working families. Authors provide an assessment of how the current work support policies help families and the impact that slight increases in eligibility could have for working families.

The Brookings Institution authored this brief on the Earned Income Tax Credit (EITC) since the inception of the “EITC Movement” ten years ago. Authors review the past accomplishments of the EITC Movement and discuss how the Movement will continue to support working families in the future, building on lessons learned. Since the movement, the VITA program has grown considerably, and the Movement has facilitated institutional changes to highlight the use of the EITC and other tax credits to help families become economically self-sufficient.

The Corporation for Enterprise Development (CFED) released a report examining the municipal governments’ new role of helping families reach economic security through wealth and asset building. The report describes five main strategies: (1) improve access to financial information, education and counseling; (2) increase access to income-boosting supports and tax credits; (3) improve the affordability, accessibility and quality of financial products and services; (4) help families build range of liquid savings and tangible assets; (4) protect consumers against the loss of income or assets in the financial marketplace. In order to implement these strategies, CFED recommends four different approaches: (1) integrate financial empowerment and asset building into city services; (2) align local, state and federal policies; (3) invest in evaluation; (4) plan for political transition. Through implementing these strategies and approaches, the municipal government aims to guide residents toward financial empowerment.

The Metropolitan Policy Program at Brookings recently released a report that compared the change in geographic distribution of the low-income population to trends of the federal Earned Income Tax Credit (EITC) recipients’ location. The data used to evaluate the change in geographic distribution was measured between 1999 and 2007 in the nation’s 10 largest metropolitan areas. The researchers uncovered that the distribution of low-income populations mirrored the distribution of EITC recipients. This similarity in distribution shows that EITC has operated as an effective tool to evade poverty. EITC has effectively adapted to the conditions of recession, and is an important resource for low-income populations regardless of their location.

The Employment and Training Administration is encouraging One-Stop Career Center staff and community partners to notify customers who need help in preparing their taxes to use Free File, a service that offers free federal and state tax preparation and e-file options for all taxpayers. Free File is made possible through a public-private partnership between the IRS and commercial tax software companies. If an individual's adjusted gross income was $58,000 or less in 2010, they may use brand-name software (e.g. Turbo-Tax) to complete their taxes for free. If an individual's income was more than $58,000, they may use the Free File Fillable Forms. ETA has issued a Training and Employment Notice that provides information on this free service.

The Institute on Assets and Social Policy (IASP), in partnership with Demos, released its third report in the Living Longer on Less series, “Severe Financial Insecurity Among African-American and Latino Seniors”. This report focuses on the financial vulnerability of African-American and Latino senior households and uses a Senior Financial Stability Index (SFSI) to assess the financial stability of the households studied. Using SFSI, the report shows that 91 percent of African-American and Latino seniors face financial vulnerability, meaning that they about 9 out of every 10 African-American and Latino seniors are unable to be economically self-sufficient. The main sources of economic security and risk uncovered were: insufficient assets, high healthcare and housing expenses as well as little to no home equity. The authors suggest that in order to address poverty among African-American and Latino seniors, policymakers should promote comprehensive reforms to support working age adults’ maintenance of economic security and preparation for retirement.

Managed by the Hatcher Group with support from the Charles Stewart Mott Foundation, the W. K. Kellogg Foundation, and the Annie E. Casey Foundation, the Tax Credits for Working Families Web site provides a one-stop resource on tax credits that support working families both nationally and in states. The Web site includes research and resources on the Earned Income Tax Credit, Child Tax Credit, Child and Dependent Care Tax Credit and the Property Tax Circuit Breaker.

The Office of Family Assistance is pleased to remind you of an excellent opportunity for State and local Temporary Assistance for Needy Families (TANF) agencies to partner with local Volunteer Income Tax Assistance (VITA) sites to help American Recovery and Reinvestment Act of 2009 (ARRA) subsidized employment workers receive additional resources.

From the Center on Budget and Policy Priorities, this news report discusses Census data that show, despite the economic recession, government efforts prevented an increase in poverty in 2009. Specifically, existing programs, such as unemployment insurance, assistance programs for low-income households, and tax credits for low-income working families, provided an important safety net. The Recovery Act’s programs and increased funding to existing programs kept more than 4.5 million people out of poverty in 2009.