Contributions of the Earned Income Tax Credit to Community Development in Indian Country

The earned income tax credit (EITC) has become a central element in a suite of programs and polices that promote “asset building” for the poor. Increasingly, it has become a way not only for individuals but also communities to turn their economic circumstances around. The Center for Social Development in collaboration with Kathryn M. Buder Center for American Indian Studies engaged ten Native community organizations currently providing free tax preparation services in a study that examined uptake and potential uses of Earned Income Tax Credit (EITC) income by Native people. Through community surveys we learned that a majority of survey respondents (88.26%) have bank accounts. Respondents indicated that they would use their tax refunds to cover personal expenses such as emergencies and catching up on bills. 24.13% indicated that they plan to put their tax return in a savings account while others plan to use the refund to obtain necessary household items such as vehicles and furniture. Community members expressed strong interest in getting information about matched savings accounts, homeownership and financial management education, as well as starting their own business. These findings provide insight into the kinds of community infrastructure and programs that help dollars stay in a community and help citizens leverage their assets.