Ensuring Families Who Qualify for the Child Tax Credit Aren’t Left Behind
This summer marks a historic moment for America’s social safety net. Last month, nearly 40 million families received their first payments of the Advance Child Tax Credit (AdvCTC), the new child allowance that pays 90% of American families up to $300 per child each month. The program has the potential to cut child poverty in half and transform lives for millions of families in need.
As with all social programs delivered through the tax code, though, there is a big hole at the center of the AdvCTC: families who don’t file taxes. Millions of American families don’t file taxes every year, largely because they don’t earn enough to be required to. Unless we can bring these families in the doors of the tax system, the AdvCTC will leave behind the 4 million children who need it most.
That’s why we built GetCTC, the first third-party portal designed specifically to make it easy for families with low or no incomes to get the flexible cash they deserve—both the AdvCTC and any of the three rounds of stimulus payments they may have missed out on. Later this month, eligible families will be able to fill out a simple form at GetCTC.org, then we’ll e-file their information directly with the IRS, and they can receive payments within days. It’s another step in our ongoing mission to ensure that every family in the country gets the tax benefits they are entitled to, especially at a time when more and more of the social safety net runs through the tax code.
The challenge of engaging non-filers is not new for us. Our GetYourRefund program helps eligible non-filers get the Earned Income Tax Credit (EITC), one of the country’s most effective anti-poverty programs. What we’ve learned from this work is that the front door matters. When we tell people in need that the way to access their benefits is to “go figure out a way to file taxes”—that’s a barrier. People may not know where to turn, have trouble tracking down the paperwork they need to do it right, or struggle to afford tax prep services. And with the stimulus checks and the AdvCTC, the problem has only gotten trickier. For the first time, people with no or very little income—who may have never filed before—are eligible for tax benefits that add up to substantial amounts of cash. The opportunity has grown, but so has the challenge.
Last year, after the passage of the CARES Act, the IRS recognized the need to reach non-filers and launched the Non-Filer Sign-Up Tool, which allowed families with very low incomes to submit a simplified tax return to claim their stimulus payments. Unlike with normal tax filing, there was no need to report income and no need to calculate eligibility for any credits—just name and address, Social Security Number, some basic family structure details, and payment information.
The Non-Filer Sign-Up Tool was—incredibly—built and launched within weeks, during the height of the pandemic. As such, it wasn’t perfect. The form relied on people who used it to figure out some subtleties for themselves, like who they could claim as a dependent and how to use old tax data to authenticate their accounts. It was hard to use on mobile phones—sometimes the only internet-connected device people have—and it was only available in English. These issues were part of the reason that, as of last fall, as many as 12 million families still hadn’t gotten the stimulus payments they deserved. But even so, the IRS proved something important: we can make filing simpler and less daunting for people with low incomes.
This spring, the IRS announced that it would again allow families with low incomes to establish eligibility for the AdvCTC and stimulus payments through a simplified filing process that only requires the information needed to process payments. But, given the herculean effort needed to stand up the new AdvCTC program in just a few months, the agency would not be able to significantly improve on the Non-Filer Sign-Up Tool which had proven difficult for many people last year.
So, with so much on the line, we decided to build one ourselves.
After the IRS issued its simplified filing standards in May, we immediately set about adapting GetYourRefund to this new use case. Next week, we’ll start testing our new portal out in the world, with a small group of outreach partners.
When GetCTC launches publicly later this month, it will allow any family without a filing obligation to file a simplified return to access AdvCTC and any of the three stimulus checks they may have missed last year (but not the EITC or other credits). Generally, that means single parents who earned less than $12,400 and married couples who earned less than $24,800 in 2020 can use GetCTC—and taxpayers without children can also use GetCTC to claim their stimulus payments.
Like the existing IRS non-filer tool, GetCTC asks for just a limited set of information to establish benefits eligibility: no income data, no dozens of lines about other credits—just basic personal information and dependents. Like GetYourRefund, it’s mobile friendly, tested with clients, and available in Spanish. It doesn’t require clients to dig through IRS instructions; it walks them through the questions they need to answer. Unlike GetYourRefund, it allows clients to e-file their simplified return directly with the IRS, without going through the free tax filing service VITA for assistance. This ability to automate simple returns will allow our VITA partners to more efficiently leverage their limited capacity to work with clients with more complex cases.
Just as when we launch all new products, we know that the debut of GetCTC is only a first step. Right now, the simplified filing process created by the IRS doesn’t accommodate the EITC or state credits, and so GetCTC clients won’t get them. Some clients may also still need some assistance to find and use the portal. We’re going to keep testing, learning, and improving over the course of the year. We’ll clarify questions and pages that clients find confusing. We’ll streamline the flow of the application to make it quicker and more intuitive for our clients. Iterative development is how we work at Code for America, and once we release it, we’ll want to hear from you about how to make it better.
And that’s just this year. Next year, we want to go even further. If the IRS updates its simplified filing guidance, we can expand this portal so it can give families access to the EITC, too. In future years, we hope to allow all families with low incomes to file relatively simple returns and get the tax credits they deserve—all for free. For this all to work, we need action from Congress, too—to fund improvements at the IRS that make these simplifications possible, and to fund the community-based organizations that do outreach to eligible families and help them navigate to this new front door.
Stay tuned—we’ll be publishing more posts in coming weeks about our process of building GetCTC, including findings from our user testing, and what we think comes next in the fight to get tax benefits to all the families who need them.