Examines the design of New York’s earned income tax credit (EITC) program for noncustodial parents (NCP) and offers recommendations for improving the implementation in both New York and other states.
“New York enacted an earned income tax credit (EITC) program for noncustodial parents (parents who do not have physical custody of at least one of their children), becoming the first state in the country to enact this type of tax credit. The credit is available to low-income noncustodial parents who pay their full child support and meet other requirements. It is designed to encourage work and child support payments and to keep noncustodial parents from falling into poverty…[This brief] discussed the program’s design, adoption, and initial results. [It] also offered recommendations for improving the implementation and take-up of a noncustodial parent EITC” (p.1). (Abstractor: Author)

Major Findings & Recommendations

• “OTDA [Office of Temporary and Disability Assistance] should consider taking additional steps to increase the number of noncustodial parents who claim the NCP [Noncustodial Parent] EITC. To encourage participation, OTDA may want to consider sending additional mailings to noncustodial parents. Currently, OTDA sends letters in September to all noncustodial parents informing them of the NCP EITC” (p.8). • “OTDA and DTF could provide training to Volunteer Income Tax Assistance sites and other tax preparers about the NCP EITC. They may want to place posters about the NCP EITC in prominent places, such as the New York subway system. They may want to place radio and TV advertisements. Considerable outreach regarding the regular EITC is conducted every year in New York. OTDA and DTF could benefit from meeting with the organizations responsible for these efforts and developing outreach strategies with them to promote the NCP EITC” (p.8). • “Other states considering an NCP EITC are advised to allow at least one year to implement it. Although New York implemented its NCP EITC in six months, both agencies responsible for its implementation recommended a longer implementation period” (p.8). • “Based on New York’s experience, it is also advisable to make it explicit in the statute that the agencies responsible for administering the tax credit may share confidential data” (p.8). • “States are also encouraged to simplify the NCP EITC tax form and not include unnecessary requirements, such as the Social Security numbers of the children, since the child support program will be verifying the child support eligibility criteria” (p.8). • “…In recognition of the higher costs of supporting two families, other states may want to consider creating a higher tax credit if noncustodial parents are eligible for both the child-qualifying EITC and the NCP EITC rather than limiting parents to one credit” (p.8-9). (Abstractor: Author and Website Staff)