Tax Filing and Take-up: Experimental Evidence on Tax Preparation Outreach and Benefit Claiming

Jacob Goldin, Tatiana Homonoff, Rizwan Javaid, and Brenda Schafer
Forthcoming at Journal of Public Economics.

The U.S. federal government, states, and non-profits all devote substantial resources to increasing take-up of refundable tax credits like the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC) through educational outreach. We study a different approach to increasing take-up: policies that encourage tax filing. In a large field experiment, we find that IRS letters about free tax preparation modestly increased filing, with a large share of the new filers claiming the EITC and the CTC. The results suggest policies that increase filing can be an effective way to increase take-up of tax-administered social benefits, even policies that do not raise awareness of the benefit
itself.

Wagner Faculty