Thread by @CAPolicyLab

New report by the California Policy Lab:

Can informational "nudges" about the #EITC and #CalEITC increase tax filing and claiming rates for the credits?

bit.ly/IncreasEITCs (1)

The federal Earned Income Tax Credit and the California Earned Income Tax Credit (CalEITC) can provide a substantial financial boost to low-income Californians--BUT--you have to file taxes to claim them: bit.ly/IncreasEITCs (2)

In a series of randomized trials, over 1 million low-income Californians who were likely eligible for the EITCs received text messages or letters, telling them about the credits. bit.ly/IncreasEITCs #RCT (3)

The #EITC experiments tested:
-Letters vs. text messages
-Government vs. non-profit messenger
-Formal vs. informal letters
-Info on how to file vs. value of credit
-Average vs. personalized credit amounts bit.ly/IncreasEITCs (4)

Our finding: Targeted outreach efforts did not increase tax filing or EITC claiming. bit.ly/IncreasEITCs (5)

However- some strategies tested in the experiments did generate engagement.
Personalized content matters: 12% of individuals who received texts with personalized (estimated) benefit amounts clicked on an embedded link vs. 9% who rec'd a simple text without benefit amounts (6)

Letters with info on free #VITA sites generated more web traffic. Letters from the Franchise Tax Board (state agency) generated more web traffic than from a nonprofit.
Formal letters from Franchise Tax Board generated more traffic than informal ones. bit.ly/IncreasEITCs (7)

Another finding: Almost 80% of CalFresh recipients who appeared eligible for the EITC in our experiment did file taxes. Among the 20% who did not file, most had very low earnings. (8)

3 key points
1. Nudges should not be sole strategy to get non-filers to claim EITC
2. Gvt + researchers should use admin data to connect eligible Californians to EITC + other prgrms
3. Future efforts could see if simplifying claiming increases take-up bit.ly/IncreasEITCs (9)

Close: With recent expansion by @GavinNewsom and #CaLeg, CalEITC claim amounts are expected to double to approx $1 billion this year. This research can help inform strategies to connect more eligible Californians to #CalEITC and federal #EITC: Full report: bit.ly/IncreasEITCs