To count as an expenditure under the program of block grants to States for temporary assistance for needy families any reduction in State tax revenues for the provision of an earned income tax credit to recipients of assistance under the program.

Amends part A (Temporary Assistance for Needy Families) (TANF) of title IV of the Social Security Act, with respect to avoidance of the penalty for failure to maintain a certain expenditure level of historic effort, to treat as an expenditure under the TANF program any reduction in State tax revenues resulting from the provision of a State earned income tax credit to TANF recipients.