Millions of Americans are eligible for the Earned Income Tax Credit but don’t claim it. Code for America is working to get them the help they need.
Here’s why it matters: the EITC is the largest benefit for workers and one of the two most effective anti-poverty programs in the United States, along with the Supplemental Nutrition Assistance Program (SNAP). But one in five eligible households aren’t claiming the EITC benefit. That’s approximately $10.5 billion unclaimed each year—or around $1,336 per household. The national EITC participation gap is more than double the SNAP participation gap.
We spent the better part of a year exploring the role Code for America could play in closing the EITC participation gap. Then, to help working families claim the EITC and other tax credits, we launched the only online, mobile-friendly application connecting tax filers with free, IRS-certified tax help at GetYourRefund.org.
The EITC is the largest government benefit for low to moderate-income workers and their families. In 2019, the EITC delivered $61 billion to 25 million eligible workers. This cash is especially important, considering four in ten Americans would struggle coming up with $400 for an unexpected expense. Low-wage and unemployed workers living in poverty need a basic level of financial stability to help them find and keep living wage jobs—and give them a chance at economic mobility.
The reasons behind the EITC participation gap aren’t what you might think. A recent California Policy Lab study says the gap isn’t necessarily due to lack of awareness, which means reaching out to non-filing populations isn’t enough to close the gap.
We asked real people about the gap, too—with user research and interviews, which are the center of our human-centered approach to helping government work better. Our findings indicate that people aren’t filing or claiming the EITC because of emotional hardship after a life event; apprehension about the ambiguous (and potentially negative) consequences of filing; and a lack of trustworthy, affordable, and accessible tax assistance.
To help address the concerns we identified and close the EITC participation gap, we’re breaking down barriers to tax filing by providing services that are trustworthy, free, clarifying, thorough, and accessible. That’s why we partnered with the IRS Volunteer Income Tax Assistance (VITA) program on a pilot for the 2020 tax season. VITA provides the kind of tax help people deserve—free of charge. The program is more accurate than private tax preparation companies because volunteers have better training and are incentivized to file accurate returns.
But VITA can’t help everyone who needs it. The program requires tax filers to visit designated sites during specific hours of operation that may not work for all tax filers from low-income households. Many tax filers have difficulty taking time off work, accessing transportation, or dealing with potentially missing tax documents onsite. VITA’s paper-based, in-person process limits its scale and capacity to reach people in the EITC participation gap.
Tax filers answer simple questions.
Tax filers securely upload necessary documents.
GetYourRefund connects tax filers with VITA.
GetYourRefund partners with VITA to prepare and review tax returns.
VITA files returns with tax filers' consent.
At Code for America, we’ve combined our experience in service design at scale with the deep expertise and national reach of VITA. We’re piloting technology and processes to help make VITA more accessible and scalable. Through partnering with local VITA organizations across the country, we’re building a digital service at www.GetYourRefund.org. This service helps tax filers get connected with VITA from anywhere in the country.
Tax filers will answer simple questions about their situation, securely upload their tax documents, and get connected with VITA to answer their questions. The VITA team will remotely prepare the tax return, speak with the tax filer to review their return, and file the return with tax filer consent. We look forward to sharing more about our EITC work in the coming months.
Following the User Need Beyond Traditional Boundaries
Lessons from a year of discovery into America’s workforce system
Meeting the Need For Flexible Cash During a Pandemic
Scaling GetYourRefund to help more people file their taxes in the COVID-19 crisis