Office of Governor Gary Locke
FOR IMMEDIATE RELEASE - November 18, 1999
Contact:  Governor's Communications Office, 360-902-4136

Washington leads nation in growth of EITC applicants

OLYMPIA — After launching an aggressive public information campaign this year, Washington had the largest increase in filers for the federal Earned Income Tax Credit (EITC) than any other state in the nation, Gov. Gary Locke announced today.

The tax credit brought an additional $29.2 million into the state in 1999 compared to 1998. Those dollars came mostly in the form of refund checks to low- and moderate-income working families. The EITC helped 301,904 households in the state in 1999 — 3,667 more households than last year, according to data compiled by the Internal Revenue Service.

Locke praised state workers for spreading the word about the EITC. "Washington state employees worked very hard to tell people about the EITC this year. I am proud of their efforts and very pleased that the EITC helped so many working families make ends meet."

Increasing the use of the EITC has been critical to the governor's strategy for welfare reform, known as WorkFirst.

"Because workers can receive the EITC in the form of a cash refund, this tax credit can increase a low-income family's earnings by as much as 40 percent," said Locke. "The EITC helps make work more attractive than welfare, provides working families with some financial stability, and significantly reduces poverty."

Every year, the EITC lifts millions of Americans out of poverty. According to data from the U.S. Census Bureau, the EITC brought 4.8 million people, including 2.6 million children, above the poverty line in 1998.

In addition to helping families, the EITC also spurs economic development by bringing extra dollars into local communities. This year, the EITC was worth a total of $436 million to Washington residents--$29.2 million more than last year. More than $348 million of the total came directly into the state in the form of cash refunds to workers.

According to the Washington, D.C. Center on Budget and Policy Priorities, 80 percent of EITC benefits come directly back to workers in the form of cash refunds, and 20 percent of the credits go to pay workers' taxes owed to the IRS. Unlike other tax credits, the EITC is "refundable," meaning that a taxpayer can receive a refund check even if he or she owes nothing in taxes.

Washington was among only four states that saw an increase in the number of households receiving the credit this year.

"Washington ran a very thorough outreach campaign this last tax season, which clearly paid off," said John Wancheck of the Washington, D.C. Center on Budget and Policy Priorities. "While the number of families receiving the EITC remained steady nationwide this year, Washington saw an increase of 3,667 households filing for the credit. I can't explain this increase by any factor other than your successful outreach campaign."

A recent survey of former welfare recipients in Washington confirms that the state is reaching workers with its outreach effort. Survey results released last week by the state's Department of Social and Health Services show that 67 percent of former welfare recipients reported they received the EITC in 1999, compared to only 40 percent who received the credit in 1998. An additional two-thirds received the credit during the time the state ran its outreach campaign.

This year, the EITC is available to workers with children earning less than $30,580 and to childless workers making less than $10,200 a year. The taxpayer's income and the number of children living in the home determine the amount of the credit. The maximum credit was $3,756 this tax season. On average, Washington residents who filed for the credit received $1,445 from the EITC this year.

Washington spent $316,000 on its public information campaign. The campaign included direct mail, radio, transit and television advertising, public service announcements, Internet information, and distribution of posters throughout the state. The state also set up a toll-free hotline to distribute EITC information, tax forms, and promotional materials, and to refer callers to free tax assistance. There are more than 400 free tax preparation sites open across the state during tax season. Staff at the hotline refer callers to the nearest site in their area.

The hotline has received more than 16,000 calls to date. In addition to taking incoming calls, state staff have contacted nearly 8,000 people who have recently gone from welfare to work to make sure they know they may be eligible for the EITC.

Locke recently announced the state would conduct a similar outreach campaign to ensure that low-income working families are aware of state assistance with childcare, Medicaid, and food stamps. "Our hard-working families need all the help they can get to raise their children and get ahead," Locke said. "The state is committed to helping low-income workers get the support they need to become self-sufficient."

Information on the EITC can be obtained through the WorkFirst website at http://www.wa.gov/workfirst or by calling 1-800-755-5317.

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