NH Earned Income Tax Credit

Yes. As long as they earn wages and meet the income and other eligibility requirements. These workers may use the Advance EITC payment option, if they wish.

Note: Some welfare recipients are required to participate in “work experience” and “community service programs” (often called “workfare”) in exchange for their cash assistance benefits. These benefits are not counted as income to determine eligibility for the EITC. However, current or former recipients who are employed in private or public sector jobs for which employers are subsidized through state welfare block grants or other government programs do earn wages that count in determining eligibility for the EITC.

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Will getting the EITC lower other government benefits? Could someone lose benefits altogether?

Generally, no. Under federal rules, the EITC (including Advance EITC payments) is not counted as income for Medicaid, food stamps, SSI or federally assisted housing programs. The EITC can count as a resource in determining eligibility for some benefit programs. Often, if the recipient has few or no other resources, saving part of an EITC refund is not enough to cause that recipient to exceed the resource limit for a benefit program. For example, if your state has a resource limit for Medicaid, here’s how it works: the EITC refund must be spent by the end of the month after the month in which it is received or the amount saved may be counted against the dollar limit on resources. However, many states now have no resource limit for families on Medicaid; that is, they do not count assets in determining eligibility. Thus, saving an EITC refund would not affect eligibility for Medicaid in those states. For SSI, under new rules passed by Congress in 2004, the EITC does not count toward the resource limits for nine months after the refund is received. For food stamps, the EITC does not count as a resource for 12 months after the refund is received. Note: The rules for the Child Tax Credit are similar to the rules for the EITC, but there are some important differences.

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What about Individual Development Accounts?

Deposits in certain types of Individual Development Accounts (IDAs), which may include some of a worker’s EITC refund, do not count as a resource in determining eligibility for the above programs or for state cash assistance programs. Welfare cash assistance programs are administered by states under a block grant called Temporary Assistance for Needy Families (TANF). Each state can set its own rules for how the EITC will be treated in determining eligibility for cash assistance. Currently no state counts the EITC refund as income to determine eligibility, except that in Connecticut, under some circumstances, Advance EITC payments may affect a worker’s TANF eligibility. The rule for most state TANF programs is that the EITC must be spent by the end of the month after the month in which it is received or it can count as a resource. However, some states may have adopted less restrictive policies. Contact your state welfare agency for the rule in your state. Rules on how the EITC may affect

“General Assistance” benefits are different in each state where a general assistance program is in place. Contact your state or local welfare agency for information.

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