EITC Innovation

Over the past year we've told you about the growing popularity the earned income tax credit (EITC) at the state and federal levels. This credit offers financial assistance to low-income workers based on family size and income. The credit usually receives strong bipartisan support and keeps many families from living in poverty. Now twenty-three states plus the District of Columbia offer some type of EITC in addition to the federal one. One criticism of the credit is that people don't know they could be eligible to receive benefits -- thus millions of dollars in credits goes unclaimed. Legislation signed into law last week in California goes a long way to ensuring that working folks are notified about the federal credit. Assembly bill 650 mandates that "an employer [will] notify all employees that they may be eligible for the federal earned income tax credit." Other states would do well to follow in California's groundbreaking footsteps.