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Does Informing Employees about Tax Benefits Increase Take-Up? Evidence from EITC Notification Laws

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  • Taylor Cranor
  • Jacob Goldin
  • Sarah Kotb

Abstract

Incomplete take-up of the Earned Income Tax Credit (EITC) is a source of persistent policy concern, with an estimated one-fifth of eligible households failing to claim the credit. To promote take-up, a growing number of jurisdictions require employers to provide EITC information to employees. We study the effect of these requirements, linking state and time variation in the adoption of the notification laws to administrative tax data. Our preferred specification yields precise null effects on EITC claiming, filing behavior, and labor force participation. The results cast doubt on the effectiveness of the notice requirements as implemented and suggest further research into other avenues for increasing tax benefit take-up.

Suggested Citation

  • Taylor Cranor & Jacob Goldin & Sarah Kotb, 2019. "Does Informing Employees about Tax Benefits Increase Take-Up? Evidence from EITC Notification Laws," National Tax Journal, National Tax Association;National Tax Journal, vol. 72(2), pages 397-434, June.
    • Handle: RePEc:ntj:journl:v:72:y:2019:i:2:p:397-434
    DOI: 10.17310/ntj.2019.2.04
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    Cited by:

    1. Jonathan Meer & Joshua Witter, 2022. "Effects of the Earned Income Tax Credit for Childless Adults: A Regression Discontinuity Approach," NBER Chapters, in: Tax Policy and the Economy, Volume 37, pages 175-198, National Bureau of Economic Research, Inc.
    2. Goldin, Jacob & Homonoff, Tatiana & Javaid, Rizwan & Schafer, Brenda, 2022. "Tax filing and take-up: Experimental evidence on tax preparation outreach and benefit claiming," Journal of Public Economics, Elsevier, vol. 206(C).

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