STOCKTON – New research estimates that San Joaquin County will miss out on $27.7 million in economic activity and 180 jobs that could have been created this year by the Earned Income Tax Credit (EITC), a federal refundable tax credit that brings refunds of up to $5,657 to lower income workers. This is because an estimated 16,000 San Joaquin County residents will fail to claim over $23 million in EITC refunds that stimulate the economy, according to the new report Left on the Table, published through a collaboration between the New America Foundation and economists at California State University at Fresno.

"Research has shown that programs such as the Earned Income Tax Credit have a 'ripple effect' in local economies, as most of the refunds are spent at local businesses, which can then increase orders, and hire and pay more workers," said Maria Sotero, a research associate for the Asset Building Program of the New America Foundation.

"It's rare for a program to so effectively boost the local economy while supporting working families - and because more people typically qualify when times are hard and unemployment is up, the EITC works even better when the need is highest," Sotero said.

The EITC is a federal refundable tax credit that is designed to give a financial boost to people at the low end of the pay scale. In order to qualify, a resident must have earned income, not be claimed as a dependent, and meet certain income requirements, along with other qualifications. The report estimates that the average claim amount in San Joaquin County in 2006 was $1,952.

The EITC is widely recognized as the federal government's most effective antipoverty program, lifting millions of low-income families and children out of poverty every year while incentivizing work and stimulating local economies. As part of the American Recovery and Reinvestment Act, the income thresholds and maximum refunds have been increased for tax years 2009 and 2010.

"We found that the EITC refunds, when spent in San Joaquin County and the City of Stockton, translate directly and indirectly into economic growth for small businesses that lead to job creation and tax revenue for the County," said Antonio Avalos, report co-author and professor of economics at California State University at Fresno.

"We've always known how important these refunds are to California families," said Anne Stuhldreher, a senior research fellow at the New America Foundation. "This report is the first to show how important they are to our local economies. By encouraging people to find out if they're eligible for these refunds, we can give struggling families a financial boost and stimulate the economy at the same time," she said.

San Joaquin already benefits from EITC refunds and the resulting economic activity when they are spent. The EITC refunds claimed in the county in 2006 totaled $94 million, and this amount could be even higher this tax year. The report's main estimates include:

• Spending resulting from San Joaquin County residents' receipt of the federal EITC created $100 million in business sales in the County, 653 jobs, and more than $24 million in wages in 2006;
• Approximately 16,000 County  residents failed to claim their refunds in 2006, the report estimates, and this number is likely to increase this tax season;
• If those eligible County residents were to fully claim their EITC refunds this tax year, they would spur $27 million in county business sales, pay $6.6 million in wages, and add 180 jobs to the County economy; and
• Statewide, the authors estimate that spending resulting from EITC claims will generate $88 million in taxes for state and local governments.

To learn if they're eligible for the EITC, San Joaquin residents can go to www.weconnect.net, an initiative of California First Lady Maria Shriver.

The New America Foundation has long worked toward helping people permanently exit poverty by advancing financial empowerment policies to make it easier for them to build savings and enter the financial mainstream.

The full report is available here: http://assetsca.newamerica.net/publications/policy/left_on_the_table

For media inquiries, please contact Elizabeth Wu at (510) 295-9859 or wu@newamerica.net.