EITC Participation and Association With Financial Distress Among Rural Low-Income Families

Abstract

This study examined Earned Income Tax Credit (EITC) participation among rural, low-income families, by income level, and investigated whether nonparticipation corresponds with increased financial distress. Rates of EITC participation among 314 rural low-income mothers were lower than national averages, especially among the lowest earners. There was, however, an increase from one year to the next, perhaps because of study involvement. Eligible families that did not participate in the EITC experienced greater income inadequacy and economic loss. Professionals who work with families in rural areas may increase EITC participation through outreach to the lowest earning families by emphasizing the need to file tax returns, discussing the potential size of the benefit, and helping families gain access to free tax preparation services.