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Memorandum on the Earned-Income Tax Credit

March 09, 1994

Memorandum for All Cabinet Secretaries and Agency Heads

Subject: Earned Income Tax Credit Directive

Last year, we fought for, and won, a major expansion of the earned income tax credit (EITC) through enactment of the Omnibus Budget Reconciliation Act of 1993. This credit will help millions of workers and is a cornerstone of our effort to reform the welfare system and make work pay.

We must ensure that all workers in America who are eligible to receive the EITC are made aware of the program and of the advance payment option. It has been estimated that approximately 2 million of those eligible for the EITC miss the opportunity to claim it because they do not even realize that the EITC is available to them. Furthermore, less than 1 percent of those who claimed EITC in past years took advantage of the advanced payment option, which would allow some participants to obtain up to 60 percent of their credit in their paychecks rather than waiting until the filing of their tax return to receive it.

In our own departments and agencies, we must begin to spread the word about the EITC and help eligible workers meet the day-to-day expenses of raising a family by claiming the advanced EITC. There are hundreds of thousands of workers within the executive branch alone who are potentially eligible for the EITC. Many personnel and payroll offices within your bureaus and agencies are not aware of the credit, and have not informed Federal employees about the possibility of obtaining the credit in their paychecks under the advance payment option.

You are directed to instruct all bureau heads, personnel, and payroll office managers in your purview to take measures, in cooperation with the Department of the Treasury, the Internal Revenue Service, and the Office of Personnel Management, to ensure that all potentially eligible employees are informed about the EITC and can claim it on an advance basis through their paychecks.

I also strongly encourage you and your bureau heads to join me over the next several weeks in incorporating these important EITC messages into speeches and presentations that you may be making before the public. Your efforts in your organization will complement an Administration campaign to promote the EITC with business leaders, members of Congress, State and local government leaders, and EITC eligibles. Through these actions, we hope to markedly improve the effectiveness of an already successful EITC program, rewarding work, and laying a foundation to end welfare as we know it.


NOTE: This memorandum was made available by the Office of the Press Secretary but was not issued as a White House press release.

William J. Clinton, Memorandum on the Earned-Income Tax Credit Online by Gerhard Peters and John T. Woolley, The American Presidency Project

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