San Francisco Working Families Credit

San Francisco is piloting a local version of the federal Earned Income Tax Credit called the San Francisco Working Families Credit (WFC). The WFC is a locally administered tax credit for employed low-income tax filers with children who qualify for the federal EITC and live in the city of San Francisco. The city office uses data supplied by the Internal Revenue Service to confirm applicants' eligibility for the WFC. Qualifying families receive a check from the city and county of San Francisco equal to a percentage of their federal EITC. They can also access free or discounted banking services, free tax preparation services, and a financial counseling hotline. For detailed information on program implementation and outcomes, see http://www.brookings.edu/metro/pubs/20060516_sfworks.pdf.

The WFC has three primary objectives:
-increasing the federal EITC take-up rate;
-promoting asset-building; and
-retaining families in San Francisco.

During the first year the WFC pilot mailed checks--equal to 10 percent of applicants' EITC, averaging $220--to nearly 10,000 San Francisco families in 2005. The combined value of all checks issued was $2,111,991.

By all accounts, the first year of the WFC generated many more applications than anticipated (more than 11,000). Because 21,466 San Francisco tax filers with dependent children received the EITC in 2004, San Francisco achieved an estimated 45 percent WFC take-up rate in 2005.