Leaving Money on the Table: Nudging Taxpayers to Claim a Refundable State Income Tax Credit
Year: 2025
Type: article
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 a control group of 9,905 taxpayers that received no contact. Taxpayer subgroups, such as self-preparers, married taxpayers that filed jointly, and rural taxpayers were among the most responsive to notification.
Source: Public Finance Review
Authors: John D. Stavick, HoaPhu Tran
Institution: Oakland University
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W4409397096