Meeting the Need For Flexible Cash During a Pandemic

 

Last week, the federal government signed a massive stimulus bill into law to help mitigate the damage that the current COVID-19 pandemic is causing in every corner of our country. The CARES Act will provide relief via recovery rebates to millions of low-income Americans, but may miss a crucial subset of that population: those who have not been required to—or able to—file tax returns in the past several years.

Fortunately, Code for America is well positioned to help vulnerable Americans file taxes and claim these rebates. On March 10th, just as the massive implications of COVID-19 were starting to come into focus, we celebrated the launch of a new digital service enabling low income tax filers to claim tax credits at GetYourRefund.org. In the days since, the pandemic has completely reshaped the scope and urgency of this work.

Why GetYourRefund

GetYourRefund is Code For America headquarters’ newest project, focused on putting more flexible cash in the pockets of low-income Americans by increasing take-up of the Earned Income Tax Credit (EITC).

The EITC is one of the most effective anti-poverty programs in the country, but there are nearly 8 million eligible households who currently do not claim their tax credits each year, leaving $10.5B in cash assistance on the table unclaimed.

We arrived at this work by following user needs during research into workforce development interventions. We shifted focus to the EITC just in time for the 2019 tax season, and spent several months working alongside tax filers to learn more about the barriers they face in claiming tax credits.

 

While awareness is part of the problem, simply raising awareness is not enough. Eligible people we spoke to didn’t file because emotional hardship interrupted their life; because they were overwhelmed trying to understand the ambiguous, and often negative, consequences of filing; because trustworthy, affordable help is hard to find; and because help isn’t available where they are and when they need it.
People need tax help that is trustworthy, free, clarifying, thorough, and accessible, and one government service was already meeting most of these needs: the IRS’ Volunteer Income Tax Assistance (VITA) program, which provides resources to Community Based Organizations across the country to recruit, train, and certify volunteers who help people claim their refunds. VITA already helps 3.5M households file taxes every year, but sites currently operate in-person. An effective digital service would make VITA more accessible so it could serve millions more families and help close the EITC participation gap.

With the help of our first VITA partners at The United Way Bay Area and Tax Help Colorado, we delivered a prototype service late in the 2019 tax season, and saw enough potential in it to invest in a pilot for the 2020 tax season. GetYourRefund.org was born.

The best laid plans…

Our plan for the 2020 tax season included some growth, but the main goal was learning and validation. We would expand just enough to validate the new digital service model for VITA and test key assumptions about its ability to scale, helping 5,000 people claim the EITC from at least 10 states. Efficiency and outreach targets would help us evaluate the service’s ability to save VITA volunteers time and reach non-filers.

 

Our team hit the ground running last fall to get ready for tax season to begin in earnest in late January. In typical Code for America fashion, we released the service in small iterations, starting with a VITA location directory and search feature, followed by client support tools so our VITA partners could get used to managing their workflow digitally. The release of digital intake on March 10th was the final piece of the puzzle. Now, anyone could go to GetYourRefund.org to get help with their taxes.

By March 12th, our first fully digital tax return had been filed and accepted for a refund of $1,192. That same day, we also started to hear from more VITA providers who were interested in using GetYourRefund to reach their clients. The COVID-19 pandemic had escalated and in-person sites were closing fast. About 90% of the VITA providers in the Taxpayer Opportunity Network were already reporting that their sites were entirely or mostly closed. Our team was suddenly confronted with a new reality—at a time when people need tax help more than ever before, one of the most effective resources for low-income tax filers was effectively shutting down. We had built something that could help, but hadn’t imagined operating at the scale needed to meet this new challenge. Could it be done?

 

Stepping up

Our answer was an emphatic yes. In a crisis like this, it’s imperative that we put people first. Over the past two weeks, we have mobilized to invite and onboard new partners, solidify our infrastructure for scale, and staff up critical support roles. Our first new wave of VITA partners from United Way of King County (WA), United Way of Virginia Petersburg (VA), Campaign for Working Families (PA and NJ), and Impact America (primarily serving AL, SC, TN, MS, and FL) are already joining the original pilot partners United Way Bay Area, Tax Help Colorado, United Way Tucson (AZ), and Goodwill Industries of the Southern Rivers (GA and AL).

We’ll continue bringing on more partners as quickly as we can. We’re grateful to the SPEC (Stakeholder Partnerships, Education and Communication) division of the IRS for approving our pilot as an option nationally, paving the way for new partners across the country to join us more easily. In the meantime, we’re working to ensure that GetYourRefund is ready to scale.

 

The most urgent need is to grow our client support capacity. We’re adding a full time Client Success Manager to the Code for America team to manage partner onboarding, support, training, and help desk requests. They’ll help us ensure that tax filers have the simple and dignified experience with GetYourRefund that Code for America is dedicated to providing to all of our clients. We’re also adding Intake Specialists at every partner site who will take point triaging new cases and providing live chat support for their site.

We’re shifting program resources internally to handle inbound partnership requests, coordinate with and convene partner leads, interface with our advisory committee, and track and respond to developing policy changes.

We’re staffing up engineering as well to increase focus on security and reliability as we scale while continuing to optimize the client experience. We use simple, reliable technology like Ruby on Rails and PostgreSQL, and have implemented an ISO-27001 and SOC2 compliant infrastructure with Aptible.

Last but certainly not least, we are leveraging the people power of our Brigade Network. Our GetYourRefund team has worked closely with the Brigades on this project from the start, but as we look to scale up quickly, this collaboration is even more critical. A rapid national response simply wouldn’t be possible without it. Current Brigade volunteer efforts around this work include onboarding and supporting local VITA organizations, forming a Partner Enablement Team to provide training for new VITA partners, experimenting with social media outreach campaigns, and more. Stay tuned for a deeper dive into these efforts in the coming weeks.

Immediate relief; lasting impact

Our efforts to quickly scale up GetYourRefund are just beginning, but already we can see the potential for an even bigger and longer lasting impact due to the stimulus bill that was just signed into law last Friday.
The recovery rebates included in the bill are estimated to increase after-tax income for those in the lowest income quintile by 16.33% according to the Tax Foundation. However, since eligibility for and delivery of the payments rely primarily on information collected through tax returns, many non-filers may miss out on this benefit . Many low income Americans are not required to file taxes, or have not filed for other reasons, such as trouble accessing their tax documents or finding a trustworthy tax preparer. It’s critical that we reach non-filers and provide them with the trustworthy, free, clarifying, thorough, and accessible tax assistance they need to receive this relief.

 

What’s more, the stimulus’ ability to motivate more low income families to file this year could have lasting impacts. Research based on the 2008 tax stimulus has found that “filing reduces the probability of living in poverty in future years, which is a result of increases in EITC claiming, workforce attachment, and earnings. These results demonstrate that temporary incentives to participate in the tax system have persistent real effects on economic activity and poverty.” (Ramnath and Tong, American Economic Journal: Economic Policy, 2017).

The federal tax filing deadline has been extended by 90 days, giving us more time to reach people in need. We can help them get flexible cash via the EITC and the recovery rebate written into the CARES Act, and increase their long term likelihood of escaping from poverty.

The stakes of our government working for Americans who need it most have never been higher. Rapidly scaling GetYourRefund will be challenging, but in this moment it’s a challenge we are excited to meet head on.