The Impact of Tax Refund Delays on the Experience of Hardship Among Lower-Income Households

O. Kondratjeva; S. P. Roll; M. Despard; M. Grinstein-Weiss

doi:10.1007/s10603-021-09501-4

The Impact of Tax Refund Delays on the Experience of Hardship Among Lower-Income Households

O. Kondratjeva, S. P. Roll, M. Despard, M. Grinstein-Weiss

Research output: Contribution to journal › Article › peer-review

4 Scopus citations

Abstract

The Earned Income Tax Credit (EITC) provides substantial financial support to low-income workers in the USA, yet around a quarter of EITC payments are estimated to be erroneous or fraudulent. Beginning in 2017, the Protecting Americans from Tax Hikes Act of 2015 requires the Internal Revenue Service to spend additional time processing early EITC claims, delaying the issuance of tax refunds. Leveraging unique data, this paper investigates how delayed tax refunds affected the experience of hardship and unsecured debt among EITC recipients. Results indicate that early filers experienced increased food insecurity relative to later filers after the implementation of the refund delay.

Original language	English
Pages (from-to)	239-280
Number of pages	42
Journal	Journal of Consumer Policy
Volume	45
Issue number	2
DOIs	https://doi.org/10.1007/s10603-021-09501-4
State	Published - 1 Jun 2022
Externally published	Yes

Keywords

Earned Income Tax Credit
Food insecurity
PATH Act
Tax refund delay
Unsecured debt

ASJC Scopus subject areas

Business, Management and Accounting (miscellaneous)
Economics and Econometrics

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10.1007/s10603-021-09501-4

Cite this

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title = "The Impact of Tax Refund Delays on the Experience of Hardship Among Lower-Income Households",

abstract = "The Earned Income Tax Credit (EITC) provides substantial financial support to low-income workers in the USA, yet around a quarter of EITC payments are estimated to be erroneous or fraudulent. Beginning in 2017, the Protecting Americans from Tax Hikes Act of 2015 requires the Internal Revenue Service to spend additional time processing early EITC claims, delaying the issuance of tax refunds. Leveraging unique data, this paper investigates how delayed tax refunds affected the experience of hardship and unsecured debt among EITC recipients. Results indicate that early filers experienced increased food insecurity relative to later filers after the implementation of the refund delay.",

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AU - Despard, M.

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AB - The Earned Income Tax Credit (EITC) provides substantial financial support to low-income workers in the USA, yet around a quarter of EITC payments are estimated to be erroneous or fraudulent. Beginning in 2017, the Protecting Americans from Tax Hikes Act of 2015 requires the Internal Revenue Service to spend additional time processing early EITC claims, delaying the issuance of tax refunds. Leveraging unique data, this paper investigates how delayed tax refunds affected the experience of hardship and unsecured debt among EITC recipients. Results indicate that early filers experienced increased food insecurity relative to later filers after the implementation of the refund delay.

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KW - Unsecured debt

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The Impact of Tax Refund Delays on the Experience of Hardship Among Lower-Income Households

Abstract

Keywords

ASJC Scopus subject areas

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