EITC Estimates in the CPS ASEC Simulations of After - Tax Income: Hispanic Population

Written by:
SEHSD-WP2012-19

Abstract

The Social, Economic, and Housing Statistics Division of the Census Bureau (SEHSD) regularly releases estimates of household income for the United States using information collected in the Current Population Survey Annual Social and Economic Supplement. As a part of this process, household income after taxes is calculated. The tax calculations use information on family relationships and reported income to simulate tax liabilities and tax credit eligibility for tax units. After-tax income is an important element in the estimation of the Supplemental Poverty Measure. Examination of the effect of the EITC requires information about the actual receipt of the EITC credit, while the tax simulator at the Census Bureau can only imply eligibility. There is evidence to suggest that take-up rates of EITC benefits differ by ethnicity and that among low-income parents Hispanics are less likely to have ever received the tax credit. This analysis uses the 2010 CPS ASEC matched to Tax Year 2009 IRS EITC data. Hispanic tax units are shown to be an important predictor of being a SESHD eligible non-participant.

Page Last Revised - October 8, 2021