Redesigning Technology to Help Low-Income Taxpayers Access the U.S. Social Safety Net

Introduction

The social safety net was established when President Franklin Roosevelt signed the Social Security Act in 1935. In the nearly 90 years since, more social welfare programs have been passed to support low-income Americans. Some of the earliest programs covered unemployment insurance (UI, passed in 1934), and the Supplemental Nutrition Assistance Program (SNAP, or food stamps) passed in 1964. Other programs focused on health insurance such as Medicaid/Medicare (1965), cash transfer programs, such Temporary Assistance for Needy Families (TANF, passed in 1993), and Social Security Disability Insurance, to name a few. Some supports can be accessed through the tax system, such as the Earned Income Tax Credit (EITC), the Child and Dependent Care Tax Credit and the Child Tax Credit (CTC), while others mentioned above (SNAP, TANF, etc) live outside the tax system and eligible individuals can apply for them through specific agencies and departments. The United States spends more than one trillion dollars every year on these safety net programs. However, this system of supports—a “safety net”— does not always stop the poor and vulnerable members of society from falling through. As shown in this paper, barriers to aid access arise for multiple reasons. Some of them are policy-driven, such as eligibility rules that impose work requirements or a minimum earned-income requirement to enable people to qualify for programs. Yet others are administrative and technological. For example, while tax credit programs are accessible through one tax return filing, non-tax credit programs require multiple applications across several agencies. These applications may be complex and require people to fill in information, provide documentation, and navigate complex eligibility requirements to understand what they qualify for. Still other barriers may be psychological, as people may avoid applying for programs due to the social stigma attached to benefit receipt. The goal of this paper is to highlight the role that technological improvements can play in improving access and does not delve into other barriers that require political or legislative action. 

Further, this paper fits into the broader agenda of modernizing the IRS, which is a six-year plan to modernize the IRS through improvements in technology and digital solutions that improve the taxpayer experience. As the IRS modernization plan continues to take shape, the ideas presented in this paper might be a useful bridge that helps connect the government agency to the people it serves using better information systems, improving the customer experience and handling sensitive information securely.

How Complexity Creates Barriers to Access

Safety net programs play an important role in reducing poverty. In 2019, nearly 31.5 million people—out of nearly 65 million—were lifted out of poverty due to a mix of tax credit programs and non-tax measures. In 2020 and 2021, more than 45 million were helped out of poverty due to pandemic relief programs. In the latest report from the U.S. Census Bureau for 2023, the programs that most significantly reduced poverty, aside from Social Security, were tax credit programs like the EITC, refundable portion of the Child Tax Credit, and SNAP.

However, barriers to accessing the safety net are real. Alexandra Schweitzer and I recently wrote an article in Health Affairs that discussed this issue. Administrative burden may be conceptualized as three broad component costs: learning costs, psychological costs, and compliance costs. These themes are echoed by people who are eligible for, but do not access, safety net and other programs to address health-related social needs. Learning costs create barriers if people are not aware a program exists, whether they are eligible for it, or how to contact or apply for services. Psychological costs include stigma and stress, mistrust of government or other institutions, and the belief that others need the benefits more. Compliance costs— or bureaucratic requirements— include complicated, multi-step application processes, confusing or inconsistent eligibility rules, and the challenges of physical or digital access to apply for benefits or social services. A recent poll commissioned by the Clapham Group found the following: 71 percent of all Americans thought “tools to make it clearer which tax credits I am/might be eligible for” and 75 percent thought “having a simple and free way of filing taxes directly with the IRS” would be helpful to them personally.

In non-tax credit programs, administration varies across different states and government agencies, which means there is no centralized filing process. In addition, while online filing is available for some programs in some states, applicants elsewhere need to physically show up at administrative offices and show proof of assets and (lack of) income before they can file for benefits. Applying for programs imposes a significant “time tax” on eligible beneficiaries. Participation rates vary a lot across these programs: while SNAP has a participation rate of 82 percent, Medicaid/CHIP at 91 percent (for children) and TANF at about 27 percent.

According to the IRS, historically, participation rates for the EITC have ranged from about 75 percent to 80 percent. In 2023, 23 million eligible families received nearly $57 billion in EITC dollars. This means that approximately three-quarters to four-fifths of eligible taxpayers claim the credit. About five million potentially eligible taxpayers do not claim the credit each year, resulting in about $7 billion in unclaimed benefits annually, according to a report by the Treasury Inspector General for Tax Administration. Among eligible non-claimants, 1.7 million filed taxes but did not claim the credit, while the other 3.3 million individuals did not file a federal tax return. Non-participants were more likely to be self-employed, living in rural areas, have a disability or have a disabled child, have low English proficiency, or have recently been unemployed, divorced, or experienced other changes to their financial status. Brian Erard and Chih-Chin Ho (2001) calculate that in 1988, about $5 billion in unpaid taxes were due to people who were legally obliged to file but did not do so and 29 percent of these individuals might actually be entitled to get money back, but somehow did not file. These individuals are likely to be over-represented in the EITC eligible groups.

Research suggests that having a state EITC may boost participation in the federal EITC program. Other studies indicate that reminders can have positive, albeit short-term, effects. A recent California experiment aimed to inform residents about their potential EITC eligibility, but the outreach had limited success. While slightly more people viewed online resources related to California’s EITC, the letters and texts did not lead to increases in tax filings, use of free tax preparation services, or claims for federal or state EITC. 

A recent Urban Institute study finds that if all barriers were removed and all eligible people received benefits from seven safety net programs, poverty would reduce significantly across states and demographic populations. The analysis examines seven programs: Supplemental Security Income (SSI); SNAP; the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC); TANF; child care subsidies supported by the Child Care and Development Fund (CCDF); the Low-Income Home Energy Assistance Program (LIHEAP); and public and subsidized housing. Differences are driven by changes in safety net participation across states, eligibility rules across states, and budgetary restrictions across states. Nationally, the total amount of benefits received would be two times higher than what families receive under current funding and participation levels, increasing from $220 to $447 billion.

One of the primary barriers to usage is the lack of reliance on multiple safety net programs. In an earlier research paper, using data from the 2019 Survey of Income and Program Participation (SIPP), I find that within the traditional safety net programs, usage of multiple programs is low. The programs measured include non-tax credit programs like SNAP, SSI, TANF, WIC, Medicaid, and unemployment insurance (UI). Results show that only 33 percent of households at or below 130 percent of the poverty line claim to have used more than one social safety net program (Figure 1). Another 38 percent of people at or below 130 percent of the federal poverty line claim to have not used any social safety net program. For example, this means that 38 percent of families of four earning less than (approximately) $36,500 per year receive no Medicaid benefits, no SNAP benefits, no TANF benefits, no WIC benefits, etc. This also means that only one-third of families earning less than $36,500 use any combination of these benefits. While these results rely on survey data—which is prone to under-reporting as shown by Bruce Meyer, Wallace Mok, and James Sullivan—administrative data on usage of multiple social safety net programs is hard to come by. 

The Department of Agriculture reports that only four percent of all SNAP households and ten percent of SNAP households with children also receive TANF. Other studies conducted by the Department of Health and Human Services (HHS) use simulations of the 2019 Current Population Survey to estimate how many people access multiple benefits. An April 2023 HHS simulation of multiple program participation that matches survey data with administrative data to the best extent possible finds numbers that are similar, though not directly comparable. Some differences may be explained by the types of programs covered—the HHS study includes tax credit programs, like the CTC and the EITC, and the definition of low income includes people below 200 percent of the federal poverty line. Even with this more generous definition, the study finds that about 26 percent of low-income households received no benefits from ten programs, 24 percent participated in one program, 15 percent participated in three programs and 9 percent participated in four programs. If people accessed only one program, that program was most likely to be Medicaid, followed by EITC and then SNAP. 

Reasons Tax Filing is Complicated

There are several reasons why tax filing is complicated. The U.S. tax code is extensive and constantly evolving. It includes numerous deductions, credits, exemptions, and rules that can be difficult for taxpayers to navigate without professional assistance. Second, tax laws are subject to frequent changes due to legislative updates, new regulations, and temporary provisions. Keeping up with these changes can be challenging for taxpayers and the IRS alike. Third, many taxpayers have income from multiple sources, including wages, investments, self-employment, and rental properties. Reporting income accurately requires understanding different tax treatments for each source. Fourth, taxpayers have varied filing statuses—single, married filing jointly/separately, head of household—and eligibility for credits and deductions based on their family size, dependents, and other factors. Fifth, tax filing requires gathering and accurately reporting various forms and documents (e.g., W-2s, 1099s, receipts for deductions), which can be time-consuming and confusing. Finally, the IRS faces resource constraints in terms of staffing, technology, and funding, which can affect its ability to provide timely assistance and process returns efficiently.

These issues are evident when it comes to claiming tax credits such as the EITC and the CTC. The EITC is a refundable tax credit designed to help working individuals and families with low to moderate incomes. The EITC is structured in a way that benefits first phase-in for low income workers, then reach a maximum level and plateau, and then phase-out when families are earning about $50,000-$60,000. The maximum benefit for a taxpayer with three or more children is $7,430, and a maximum for a taxpayer with no children is $600. The EITC is a refundable credit, which means that taxpayers can get a cash refund for the amount that exceeds their tax liability. 

The CTC is a partly refundable tax credit that provides financial assistance to families with qualifying children. It has an earned income requirement, which means that the credit largely benefits middle to high-income taxpayers, though it does phase-out at higher income. However, during the pandemic, the CTC was modified significantly, with increases in the size of the credit and providing the ability for families to get monthly payments rather than waiting until the end of the tax year to get the cash. The maximum value of the CTC is $2,000 per child, while the refundable portion is $1,600.

Studies and analyses of the EITC and CTC often highlight several types of filing issues that can affect eligible individuals. These issues can impede the ability of taxpayers to correctly claim the credit and receive the full benefit. For example, Wojciech Kopczuk and Cristian Pop-Elich (2007) show that meeting the eligibility requirements for the EITC is often complicated for taxpayers to figure out. Eligibility depends on income level, filing status, and the number of qualifying children. Qualifying children can refer to an applicant’s own children, grandchildren, or foster children, and must be 19 years of age or younger, or be permanently disabled. Children also have to meet the residency criteria, which means more than half the year for an applicant’s own child, and one year for a foster child. However, as a recent Congressional Research Service (CRS) (2023) report points out, it is often tricky to figure out who can claim the EITC if say, the parents, grandparents, and an aunt all live in the same household as the child. In these cases, “tiebreaker” rules are applied, such as giving preference to the parents if they are filing jointly, giving preference to the parent with whom the child spent a longer period of time, giving preference to the parent with the higher adjusted gross income, and so on and so forth. If after tiebreaker rules are applied and the taxpayer is not able to claim a qualifying child, they can still claim the EITC for single taxpayers with no children. It is not surprising, therefore, that a large majority of errors in filing are a result of non-compliance related to this eligibility criteria for a qualifying child. Janet McCubbin (2000) finds that nearly 70 percent of over-claiming is related to the qualifying child criteria and cites IRS officials saying that nearly 50 percent is unintentional. The IRS imposes a penalty on taxpayers who make incorrect claims. A taxpayer is barred from claiming the EITC for a period of 10 years after the IRS makes a final determination to reduce or disallow a taxpayer’s EITC because that individual made a fraudulent EITC claim. A taxpayer is barred from claiming the EITC for a period of two years after the IRS determines that the individual made an EITC claim “due to reckless and intentional disregard of the rules” of the EITC, but that disregard was not found to be fraud.

Elaine Maag, Elizabeth Peters, and Sarah Edelstein (2016) highlight that children often live in complex custody arrangements, frequently moving between homes or adjusting as circumstances require. Increasingly, some children reside with relatives other than their parents—either temporarily or long-term—and many live in multi-generational households. These shifts are especially common among disadvantaged families, as children growing up in poverty are more likely to experience complex and unstable family structures.

Many eligible individuals may find it challenging to navigate these rules accurately without assistance. Studies of the federal EITC have found that informational complexity and low program awareness contribute importantly to low EITC participation. Properly reporting income is crucial for determining eligibility and calculating the amount of the EITC. Studies have found that errors in income reporting—including underreporting or misreporting income—can lead to incorrect eligibility determinations or benefit amounts. Choosing the correct filing status (e.g., single, married filing jointly, head of household) is essential for determining eligibility for the EITC. Errors in filing status selection can affect eligibility and the amount of the credit received. The EITC provides higher credits for taxpayers with qualifying children. Errors in determining who qualifies as a qualifying child based on relationship, residency, and age requirements can lead to incorrect calculations or denial of the credit. Some taxpayers may inadvertently over-claim or under-claim the EITC due to misunderstandings of the credit rules or errors in calculating income or household composition. Over-claiming can lead to audits and penalties, while under-claiming results in missing out on potential benefits. Access to accurate information about the EITC and assistance in filing tax returns correctly is critical. 

Many of these eligibility requirements apply to the CTC as well. The qualifying child should have lived for more than half the year with the taxpayer. Eligibility rules for the 2017 Tax Cuts and Jobs Act (TCJA) limited CTC eligibility to dependents with Social Security Number (SSN), eliminating access for around one million children previously eligible to be claimed. A 2021 CRS report points out that under law covering the years 2018 through 2025, the CTC is not available for children who did not have a “work-authorized SSN”—i.e. those who provide an Individual Taxpayer Identification Number (ITIN). The EITC is also inaccessible to filers without an SSN, which restricts access for over five million ITIN filers. Eligibility policy changes and differences between programs increase claiming confusion. A recent report from the Bipartisan Policy Center shows that many taxpayers with low incomes mistakenly assume they are not eligible for the CTC. This was evident during the pandemic when the CTC was rolled out as an advance monthly payment in July 2021. Households covering 65 million children were eligible to receive it. However, the initial advance payments disbursed to households fell short of this target, missing six million qualifying children. At its high point in December 2021, the advance payments still remained well-short of the total eligible population by four million children. Families who missed out on the payments were more likely to be lower income, out of the workforce, or non-English speaking.

Addressing these filing issues requires simplifying tax filing processes, increasing taxpayer education and outreach, expanding access to free tax preparation assistance programs like Volunteer Income Tax Assistance (VITA), and enhancing IRS oversight and enforcement measures. The IRS offers several resources to help taxpayers determine if they qualify for the EITC and how much they may receive. This includes online tools, publications, and tax preparation assistance programs. Taxpayers can use the IRS’s EITC Assistant tool on their website, which guides them through a series of questions to determine eligibility and estimate the credit amount. These efforts aim to improve compliance, reduce errors, and ensure that eligible taxpayers receive the full benefits of the EITC. A study looking at the 1990s shows that the staggered introduction of electronic filing of taxes had a large effect on tax filing and EITC claims across states. The IRS introduced e-filing of tax returns in 1986. Electronic filing made it easier for the IRS to process returns and reduce errors, and made it easier for taxpayers to receive refunds faster. The study finds that the bulk of this effect is due to participation by non-filers. 

Current IRS Approaches to Supporting Taxpayers

There are several ways in which the IRS supports taxpayers. The IRS provides various online tools and resources on their website that taxpayers can use to determine their eligibility for these credits. These tools help calculate the credits and ensure taxpayers claim the correct amount. The IRS partners with community organizations and volunteers to offer free tax preparation assistance through programs like VITA and Tax Counseling for the Elderly. These programs particularly help low-income taxpayers, seniors, persons with disabilities, and limited English-speaking taxpayers to file their taxes accurately and claim credits like the EITC and CTC. The IRS publishes detailed guidance, FAQs, and publications that explain eligibility requirements, how to claim the credits, and what documentation may be needed. Taxpayers can contact the IRS directly via phone or visit local IRS Taxpayer Assistance Centers for in-person help. IRS representatives can answer specific questions about eligibility and filing requirements related to the EITC and CTC. By offering these resources and support mechanisms, the IRS aims to ensure that eligible taxpayers receive the full benefits of these tax credits, which can significantly improve their financial well-being.

However, there are several problems with how the current system works. First, the current system relies on the taxpayer to claim tax credits and benefits assistance. As discussed above, if there are barriers to taxpayers understanding their eligibility or how to file for the right benefit amount, this prevents them from getting the help they need. Many people don’t understand that they need to file taxes in order to claim credits, so this leaves money on the table. Interventions aimed at reducing administrative burdens associated with filing may be more successful in encouraging non-filers to take-up the EITC. A 2020 research study from the California Policy Lab suggests that even with referrals to VITA or online resources, filing is too complicated or costly for non-filing, eligible individuals. Potential filers may be discouraged by the collection of required documentation, the financial costs of filing their taxes, or the effort needed to seek free tax preparation assistance. These barriers, which can confound the average tax filer, pose even greater challenges for Californians in poverty. Very low-income households—especially those with no history of tax filing and those with limited experience interacting with government or completing complicated government forms—may find filing a return especially challenging. While VITA services are meant to reduce some of these barriers, they may not be sufficient. Increasing the number of locations, operating hours, and online availability of free tax support may be helpful for this population.

Second, when the IRS detects a problem with a filing, they have a manual process for auditing the return. Almost all EITC audits are correspondence audits—i.e., conducted via the mail. For FY 2018, less than one third (31 percent) of EITC claimants who were audited had a complete interaction with the IRS that led to some resolution of their EITC claim. In contrast, in FY 2018, 43 percent of audited EITC claimants were denied the credit because they never responded to the audit notice. That is, the “non-response rate” was 43 percent while 26 percent responded to some IRS notices, but the EITC was denied because the taxpayer stopped responding and did not petition the tax court or sign an agreement with the IRS. The “default assessment rate” was 26 percent.

Third, the IRS direct file system can help individuals file their taxes and claim eligible credits, but the requirements can still be burdensome. Currently available in only 24 states, direct filing requires taxpayers to have a SSN or ITIN for all individuals on their return, bank account and routing numbers for direct deposit refunds, adjusted gross income, and exact refund amount from their last tax return, a current address, a self-selected PIN, and details about any UI and SSA benefits. The system is more practical for those with simple returns but cannot currently accommodate claims for instance, for the Child and Dependent Care Credit. It also excludes taxpayers with gig or rental income or those who itemize deductions. Additionally, there is no integration with state tax systems, though some states are exploring it, which complicates adoption.

How to Use Technology to Improve the System

Given the types of challenges taxpayers face, here are a few proposed solutions that focus on improving the technology to reduce burdens on taxpayers.

Pre-filled tax returns: As noted above, many eligible taxpayers are not claiming tax credits either because of a lack of awareness of the program or difficulties in filing. With improved technology, the IRS could provide pre-filled tax returns for taxpayers, especially those eligible for refundable credits like the EITC and CTC. Pre-filled returns would include income information reported to the IRS by employers and other sources, simplifying the filing process and reducing errors. Since so much of the confusion around EITC eligibility revolves around the definition of a qualifying child, pre-filled returns could help minimize errors. A recent research paper shows that for a large majority of low-income taxpayers with simple tax returns, pre-populating returns would provide accurate returns and simplify filing. Countries like Denmark, Belgium, Estonia, Chile, and Spain already offer such pre-populated returns to their citizens. The IRS could make an assumption about the correct taxpayer based on other information they may already have, such as childcare expenses submitted in the previous year or receipt of the child tax credit, or information from other government programs, and then allow other taxpayers to challenge that claim. This would ensure that only one taxpayer receives the refund rather than having to audit multiple returns for the same qualifying child. 

Integration with other benefit programs: If the IRS is administering benefit programs, such as the CTC and the EITC, it could become the one-stop shop for taxpayers to share information about income and assets that could then be provided to other government agencies for eligibility determination for TANF, Medicaid, or SNAP, for example. This would reduce duplication of efforts for taxpayers who participate in these programs. I have previously written about the idea for a one-stop shop where beneficiaries could supply all of their information at one time and it becomes the responsibility of the government to figure out program eligibility.

Implementing a Federal Digital ID system: A recent FREOPP paper highlights using digital technologies for the purpose of identity verification while providing more convenient access to federal benefits. Around the world, policymakers are establishing digital identities to facilitate citizen interactions with governments and to prevent fraud and identity theft. Several countries, most notably Estonia, have successfully addressed the problem of waste, fraud, and abuse by enacting a cryptographically secured digital identity system. Such systems work by pairing a chip-enabled identification card with a personal identification number (PIN) that the user memorizes. Unlike Social Security Numbers, which are effectively in the public domain and often subject to misuse, the modern digital approach makes it more difficult to misappropriate someone’s identity. Over time, a transition to a federal digital ID for certain public welfare benefits could ensure that hundreds of billions in federal benefits reach their intended beneficiaries, 

Advance payments and monthly installments: Low-income taxpayers often struggle with liquidity issues throughout the year. Advance payments could help resolve some of these challenges. With improved technology and data, the IRS could proactively advance EITC and CTC monthly payments to households who choose to receive them, rather than waiting till the end of tax season. During the pandemic recovery, the CTC expansion and monthly payments were critical supports for families in need. Administering these payments could become easier with improved technical support. Nina Olson of the Taxpayer Advocate has written about how a monthly CTC could be administered with minimal burdens on taxpayers.

De-linking benefits and work: The IRS currently functions as both a tax agency with the explicit purpose of collecting tax revenues, as well as a benefits administrator that disburses social safety net payments to eligible beneficiaries. Part of the complexity arises from the dual role that it has to play. There have been several suggestions to de-link these two functions. If for example, the EITC payments were not linked to the size of the family—and the definition of qualifying child—they would be easier to determine. The IRS could set up separate systems that allow immediate relief to low-income taxpayers while disbursements based on family type could be administered separately.

Technology and digital tools: Investing in technology and digital tools to improve taxpayer access to information, eligibility determinations, and filing assistance can enhance the ease of claiming tax credits. In the absence of the IRS populating tax returns, a short-term solution could be greater investments in Generative AI (GenAI) tools. GenAI tools can play a significant role in assisting with EITC filing by providing accessible and user-friendly solutions to help taxpayers navigate the complexities of tax preparation and ensure accurate filing. For example, GenAI tools can utilize algorithms to ask taxpayers a series of questions to determine their eligibility for the EITC based on income, filing status, and household composition. This automated process helps ensure that taxpayers understand whether they qualify for the credit before proceeding with their tax filing. These tools can guide taxpayers through the tax preparation process step-by-step, helping them accurately report income, claim dependents, and select the appropriate filing status. This reduces the likelihood of errors in filing that could affect EITC eligibility or credit amount. In addition, GenAI tools can perform real-time calculations to estimate the amount of EITC a taxpayer may qualify for based on their inputs. This helps taxpayers understand the financial impact of claiming the credit and plan accordingly. GenAI tools can provide guidance on the documentation needed to support an EITC claim, such as income statements (W-2 forms, 1099 forms), proof of residency for qualifying children, and other relevant documents. This ensures that taxpayers have all necessary paperwork ready for filing. Finally, GenAI tools can integrate with existing tax preparation software platforms, enhancing their capabilities to handle complex tax scenarios and ensuring seamless filing of tax returns that include EITC claims. An added advantage of GenAI tools is that they can be designed to be accessible to a wide range of users, including those with limited English proficiency or digital literacy. They can provide multilingual support and simplified explanations to reach diverse populations effectively. 

The IRS is currently investing in the use of AI for specific purposes such as transferring data from paper tax returns to digital forms, validating the data entered, and also automating the integration of payment systems so that taxpayers can authorize direct withdrawal from their bank accounts. Further, the IRS has been using GenAI technologies to detect cases for auditing. Since January 2022, IRS voice and chatbots—available in both English and Spanish—have assisted over 13 million taxpayers, reducing wait times by helping them resolve tax issues, including setting up about $151 million in payment agreements. These chatbots simulate human interaction by responding to taxpayer questions and requests through a web or mobile app. At the end of a conversation, users can select a “representative” button to connect with a live agent if needed. However, tax advisers caution that current chatbots may be helpful with general tax advice but occasionally provide inaccurate responses to specific prompts.

Conclusion

To conclude, the current system under which benefits payments are either disbursed through tax credits obtained at the time of tax filing, or through separate applications submitted for specific programs puts all the responsibility on the eligible taxpayer to make sure they apply for what they are eligible for. This has resulted in a situation where participation rates in benefit programs are well below 100 percent in many cases. My own research on the safety net exemplifies this. For non-tax credit programs, nearly one third of people with low incomes claim that they do not receive more than one to two programs. For the EITC, about 78 percent of eligible families claim, while for other programs, like SNAP and TANF, participation rates vary from 85 percent to 25 percent. There are several issues with the current system that make it really difficult for eligible families to file for the credit. They have to understand eligibility, provide income statements, proof of qualifying child, and household status. Efforts to increase awareness, simplify the filing process, and provide accessible tax assistance services aim to improve participation rates and ensure that eligible individuals receive the financial support they are entitled to.

In this paper, I highlight several ways in which technology can help improve access. The key challenge is to make it easy for taxpayers to submit information at one time that determines whether they are eligible for different programs. The government has information on W-2s and other sources of income so why not make it easier for taxpayers to file? They could test auto-populating returns. Further, why not bring other safety net programs into the mix?

It is also worth thinking through whether policymakers can de-link the benefit disbursement from the IRS task of collecting tax revenues or providing refunds. For instance, the EITC is both a work credit and also a credit to help families with children. One simplification is that the IRS only deals with the worker credit and that requires verification of income and not the qualifying child. That will be easier to track and verify. Then there is a separate process to verify the safety net payment conditional on family size and composition.

By implementing these policy suggestions, policymakers can reduce administrative burdens, increase uptake among eligible taxpayers, and ensure that those who qualify for the EITC and CTC receive the full benefits they are entitled to, thereby supporting financial stability and economic mobility for low to moderate-income families.