- Category: Nudge, Safety Net
POLICY REPORT: Increasing Take-Up of the Earned Income Tax Credit
JOURNAL PUBLICATION: Can Nudges Increase Take-up of the EITC?: Evidence from Multiple Field Experiments
(Published in November, 2022, in American Economic Journal: Economic Policy).
The federal and state Earned Income Tax Credits can provide a significant financial boost to low-income Californians. However, there is concern that some eligible Californians are missing out on these credits, and this report summarizes a two-year effort to increase the number of eligible Californians who claim the federal and state Earned Income Tax Credits (EITCs), which can provide a significant financial boost to low-income families.
In a series of randomized trials, more than one million Californians received text messages and letters designed to inform them about the credits. Although some people engaged with online resources about the EITC shared in the texts and letters, these efforts had no effect on increasing the number of people who filed a tax return or claimed the EITCs, indicating that these additional, targeted outreach strategies were not enough to increase take-up of the EITCs amongst low-income households.
Select Media Coverage of Increasing Take-Up of the Earned Income Tax Credit:
CNN: Millions of low-income Americans are at risk of missing out on stimulus payments April 8, 2020.
NPR’s Planet Money: The Limits Of Nudging: Why Can’t California Get People To Take Free Money? February 4, 2020.
Fresno Bee: California has a tax credit that many are missing out on. Here’s what you can do to collect it January 23, 2020.
Market Watch: ‘Taxpayers are leaving millions of dollars off their returns.’ Why Americans repeatedly overlook this lucrative tax credit February 1, 2020