RIVERSIDE -- Many rural Latino families who qualify for the federal earned income credit (EIC) do not receive it. In a recent study of 35 low-income families in Kern and Madera counties, University of California Cooperative Extension researchers found that only 36% of the eligible families filed for and received the EIC for 1999, whereas nationally more than 80% of eligible households receive the credit.

The EIC is a federal tax credit that can significantly enhance the income of low- to moderate-income workers. For example, for the 2002 tax year, workers who are raising two or more children in their home and have an adjusted gross income below $33,178 if single, or below $34,178 if married, may obtain up to $4,140 in EIC. Qualifying workers who filed federal tax returns recover income tax withheld from their pay. Those who do not earn enough to pay income tax may also receive cash.

The EIC can reduce low-income families' dependency on food banks, WIC (Women, Infants and Children) and other public support. Perhaps just as important as alleviating hunger, it can have a positive psychological effect on families, according to Karen Varcoe, UC Cooperative Extension consumer education specialist, who led the study.

“It raises their morale,� Varcoe said, “and their sense of economic well-being to pay their own way. We've found in other studies that one reason qualified Latinos don't apply for food stamps is because they don't want to ask for assistance. The EIC is a return of their own money for the most part.�

Based on interviews with the 33 eligible Central Valley families, it appears that most of the families lacked accurate information about EIC, their eligibility, and filing procedures for the benefits, said Varcoe, who is based in Riverside. Cultural differences and difficulty understanding English may be barriers as well.

Many low-income workers who did not owe taxes or who did not expect withholding tax refunds did not seem to understand that they could receive refunds. Also because legal immigrants are ineligible for many public programs, they often do not realize that they may qualify for EIC.

The isolation of the rural communities, coupled with possible language and cultural barriers, may prevent qualified Latino workers from receiving sufficient accurate information about the EIC, Varcoe said. In urban settings, there is greater access to social service providers who offer assistance.

After the first year of the UC Cooperative Extension interviews, the researchers sent the study participants Internal Revenue Service information flyers about the EIC written in English and Spanish. The second year of the study revealed that the number of eligible families receiving the EIC more than doubled.

“Our study findings indicate the importance of developing bilingual informational campaigns,� said Varcoe, “so that accurate information about the EIC, eligibility requirements, and free or low-cost options for filing taxes and receiving refunds will reach the rural Latino communities. And, the information has to come from a credible source, such as a Cooperative Extension advisor.�

Workers who were eligible for the EIC but did not claim it can amend their tax returns for up to three previous years. They will need IRS form 1040X, Amended U.S. Income Tax Return. Tax forms are free from the IRS.

Information about the EIC is available in Spanish and English from local UC Cooperative Extension offices, libraries and the IRS Web site: www.irs.gov.

The California study was funded by the UC Division of Agriculture and Natural Resources. It is part of a larger 15-state study that is looking at the impact of welfare reform in rural America.

Additional Media contacts:

Karen Varcoe, UC Cooperative Extension consumer education specialist, (909) 787-3419, karen.varcoe@ucr.edu

Martha L. Lopez, UC Cooperative Extension nutrition, family & consumer science advisor, (805) 645-1461, mllopez@ucdavis.edu