EARNED INCOME TAX CREDIT & FAMILIES
“Creating Community-Designed Approaches for EITC Uptake in Rural North Carolina,” is a new project that will focus on understanding ways to help more eligible families take advantage of the Earned Income Tax Credit (EITC), a federal benefit that historically has shown success in lifting families out of poverty. The federal EITC was created in 1975 to assist low- to moderate-income working families, particularly those with children, by eliminating their income tax liability. For households with three or more qualifying children, the EITC can mean a credit of up to $6,557. Workers without a qualifying child may be eligible for a credit up to $529.
However, in North Carolina, more than 20% of the state’s qualifying households never claim the credit. As a result, families and poor communities are collectively losing $450 million annually – money that would not only boost household incomes but improve residents’ overall health and well-being. In North Carolina, many of our state’s poor are concentrated in rural communities already struggling with an increasing loss of jobs and a lack of economic opportunity. In these communities, particularly those where people of color reside, workers are trying to make ends meet on poverty-level wages, which amounts to about $26,000 for a family of four. The struggles these families and their children experience because of poverty can result in poor and disparate outcomes across their life course – from infant mortality, to third grade reading, to chronic disease, and beyond. Families of color who reside in these communities are especially impacted because they face additional barriers to financial advancement.
ABOUT THE PROJECT
Funded by the Robert Wood Johnson Foundation, the team will examine the role of the federal EITC in improving the lives of some of the nearly 4 million people in the state’s small towns and rural communities. The study will focus specifically on McDowell, Rockingham, Robeson, Beaufort, Nash, Halifax and Edgecombe counties.The goal of this project is to spark action that leads to change and increased access to financial resources for rural communities, particularly those where people of color reside.
The project’s interdisciplinary team includes co-principal investigator Anita Brown-Graham with UNC School of Government and ncIMPACT; co-investigators Calvin Allen with Rural Forward NC; Alexandra Sirota and Heba Atwa with the North Carolina Justice Budget & Tax Center; and Danny Ellis with Together Transforming Lives, Inc. School of Social Work associate professor Paul Lanier is also a co-investigator on the project. The project team includes Whitney Afonso, Katherine Bryant, Phillip Sheldon, and Brooklyn Mills.
Importantly, the research will be led by a Research Advisory Team made up of community leaders and by local community research teams in each county. They will play a vital role in leading the research and in creating community solutions. This will help to ensure that the interests, needs and voices of the community are supported and promoted in any new policies, programs and strategies for increasing the use of the federal tax credit and for advancing conversations around the reduction of poverty in low-wealth, rural communities.
The Research Advisory Team members’ names and organizations will be posted after their first meeting in mid-February. Pictures of project team members will also be posted shortly.
RESEARCH QUESTIONS & DESIGN
We are focused on learning more about EITC uptake in rural North Carolina, exploring individual, community, and systemic influences on access and use. We will work alongside community leaders and stakeholders to identify strategies for increasing EITC uptake in target, rural counties. Our final deliverable will be a series of recommendations and strategies to increase EITC uptake in rural counties with state and national replication potential. We are proposing a concurrent mixed-methods study using participatory research methods and literature review as well as quantitative data analysis to describe EITC uptake by place and demographic characteristics; test the strength of the relationship between demographic, economic, and institutional factors on EITC participation and model how these factors affect likely participation in EITC; and differences in EITC uptake in North Carolina, particularly by race and ethnicity. We will be partnering with community leaders in McDowell, Rockingham, Robeson, Beaufort, and Nash/Halifax/Edgecombe counties, which represent the geographic, racial, ethnic, and cultural diversity of rural North Carolina. Local policy perspectives and approaches vary across these counties.
Aim 1: Develop a comprehensive understanding of EITC uptake in NC.
Initial Research Questions: Which population subgroups are least likely to take advantage of EITC in rural areas of NC? How do rural and urban areas differ on uptake of EITC? How does use of EITC by NC residents compare to residents in states with and without a state-level EITC? How have patterns of EITC uptake changed before, during, and after the state EITC? What are the personal, community, and institutional factors that community residents report supporting and inhibiting EITC uptake? How do those factors operate within communities with significant numbers of black and brown residents?
Aim 2: Identify strategies that rural communities can utilize to increase uptake of EITC, and potentially other supports.
Initial Research Questions: What resources are available in communities to support uptake? How might strategies from other states and urban areas be adapted for rural communities? What barriers/facilitators exist for creating new partnerships and leveraging existing resources / relationships?
Updates about the project will be said via social media, the JIF newsletter, on the events page and through blogs. Questions? Please contact Sarah Verbiest at 919-843-2455.
The UNC project is funded by the RWJF Equity-Focused Policy Research Building Evidence on Income Supports for Low-Income Families with Young Children program.