TANF block grant funds can not be used to cover either the portions of state EITCs used by TANF eligible families to reduce their tax liabilities to zero or any portions of state EITCs going to taxpayers who are not TANF eligible. To take maximum advantage of this opportunity, New York State recently amended its state TANF plan to define all families with children that meet New York's financial criteria for the EITC as being TANF eligible, although they would not be able to receive traditional cash assistance unless they met other more restrictive criteria. A threshold is the lowest income level at which a family has state income tax liability. The threshold calculations include earned income tax credits, or other general tax credits, exemptions and standard deductions. Credits that are intended to offset the effects of taxes other than the income tax or that are not available to all low-income families are not taken into account.
Negative liability is a refund to the taxpayer.