How Would Changes to the Earned Income Tax Credit Affect Rural Recipients?

The earned income tax credit (EITC) has become a major source of income support for low-income rural workers and their families, especially in the South, where the rural poor are concentrated. Program benefits for rural areas are expected to total about $6 billion in 1996, nearly double the 1992 amount, providing benefits to an estimated 4.5 million low-income rural workers and their families. Increasing concerns about escalating costs and the targeting of benefits may result in changes to the EITC program that would reduce both benefit levels and the number of eligible low-income rural workers. Proposed changes to improve the targeting of benefits would exclude many farmers from the program.