Making the Child Tax Credit More Accessible

Impact

• Over the course of 2021 and 2022, nearly 200,000 households used GetCTC to claim their Child Tax Credit and other tax benefits like the pandemic stimulus payments.
• This represents an estimated $685 million in tax credits distributed through GetCTC.
• GetCTC proved that a free and accessible filing tool could both reduce barriers and simplify the filing experience, helping close equity gaps in the distribution of benefits through the tax system.

The challenge

In 2021, the American Rescue Plan expanded and enhanced the Child Tax Credit (CTC), making it the nation’s first true child allowance, which paid 90% of American families up to $300 per child each month. It was one of the most significant investments in ending child poverty in our nation’s history—the expansion cut child poverty nearly in half. Many people who qualified for the CTC didn’t traditionally submit taxes to the Internal Revenue Service (IRS) because their income didn’t rise to the threshold required to file a tax return.

In an attempt to help people with low income claim benefits, IRS authorized a simplified filing process, which allowed families who weren’t required to file taxes to claim most key tax benefits by submitting just a short return with a limited set of information as opposed to a traditional full tax return.

We knew that in order to encourage uptake of this option and get benefits like the CTC, pandemic stimulus payments, and other tax credits into the hands of people with little to no income, there needed to be an accessible, free tool to engage in that simplified filing process. That’s why we built GetCTC.

Our approach

Making direct, flexible cash more accessible—and thus, equitable—helps close wealth gaps that have been widening for years. By focusing on building a tool for people who qualified for simplified filing (generally those who earn less than $12,500 filing single or $25,000 filing jointly), we were attempting to close that gap. We knew that to reach this population, we needed to build an accessible tax filing tool—one that was mobile-friendly, available in multiple languages, and built with human-centered design principles for a simple workflow.

In order to distribute these tax credits, the IRS needed basic information like names, Social Security numbers, addresses, bank information, and children’s information. Families and individuals could use GetCTC to provide this information to the IRS and claim their CTC and any pandemic stimulus payments they might have missed.

Collecting and sending this information to the IRS required overcoming various technical and administrative hurdles. It required using the IRS’s sample code in Java, even though our product is written in Ruby. We had to quickly demonstrate that we could meet the IRS’s strict security and privacy requirements, and that we could successfully e-file correct tax returns. In less than four months, we had to properly format tons of data, engage in a lot of trial and error using the IRS’s e-filing test environment, and take apart the IRS e-filing desktop application to see what parts we could borrow. Though the timeline was challenging, we leveraged our team’s expertise throughout and devised work processes that adhered to principles of human-centered technology while meeting federal agency requirements.

We also conducted extensive quantitative and qualitative research with people who don’t traditionally file taxes to understand the challenges they faced, conducting randomized control trials and disseminating learnings on how to best design for and reach people who are missing out on tax credits. We made various expansions to the tool over time to make sure it distributed the maximum amount of benefits to the widest net of people. For example, when the government expanded the simplified filing regulations to Puerto Rico, we made the tool accessible to nearly 300,000 families there, most of whom don’t file federal tax returns with the IRS.

Our work underscored the key principles of Code for America’s work on tax benefits. Filing taxes is complicated and daunting, and the lack of easy ways to do it stops many families with low income from claiming the tax benefits they are owed. But a simple and accessible front door, requiring no more data than the IRS absolutely needs, can be a game-changer.

Outcomes

After running for 10 weeks in fall 2021 and another six months in 2022, GetCTC helped nearly 200,000 households claim an estimated $685 million—an average of $3,500 per return. Nearly four out of five clients reporting the tool was “easy” or “extremely easy” to use. The majority of clients used GetCTC on mobile devices and typically finished in 10-15 minutes.

GetCTC proved transformational for first-time filers and families with low income. It also proved that a streamlined, targeted, and simplified tax filing process is critical to expanding access to tax benefits. Putting flexible cash in the hands of people who need it is one of the most powerful ways to lift people out of poverty, close wealth gaps, and expand financial opportunities for all.

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