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Leaving Money on the Table: Nudging Taxpayers to Claim a Refundable State Income Tax Credit

Author

Listed:
  • John D. Stavick
  • HoaPhu Tran

Abstract

In 2020, Nebraska sought to provide property tax relief through an income tax credit against public school property tax levies. Millions of dollars of the tax credit were offered and went unclaimed. The state responded by mailing notifications to 6,000 taxpayers that informed them of the opportunity to claim the missed credit using a simplified form. Treatment effects estimated using taxpayer microdata show that the credit take-up rate of notified taxpayers was 20 percentage points greater than that of 9,905 taxpayers selected for potential notification but received no contact. Taxpayer subgroups, such as self-preparers, married taxpayers that filed jointly, and rural taxpayers were among those most responsive to notification.

Suggested Citation

  • John D. Stavick & HoaPhu Tran, 2025. "Leaving Money on the Table: Nudging Taxpayers to Claim a Refundable State Income Tax Credit," Public Finance Review, , vol. 53(4), pages 415-439, July.
    • Handle: RePEc:sae:pubfin:v:53:y:2025:i:4:p:415-439
    DOI: 10.1177/10911421251327176
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    More about this item

    Keywords

    property tax; income tax; state tax administration; taxpayer behavior;
    All these keywords.

    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments

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