BPC Recommendations to Increase Take-Up and Administration of Critical Tax Credits

Washington, DC – The pandemic highlighted and exacerbated just how many families and workers depend on tax provisions like the Child Tax Credit (CTC) and Earned Income Tax Credit (EITC). A new paper, Claiming Complexity: Solutions to Improve Take-Up and Administration of the Child Tax Credit and Earned Income Tax Credit, from the Bipartisan Policy Center offers recommendations to increase uptake and reduce improper payments of these two critical tax credits.  

While both credits have enjoyed decades of support from both parties, they are hindered by administrative barriers such as underwhelming take-up rates, improper payments, and an ineffective audit process. 

“As Congress continues to deliberate CTC and EITC reform, steps can be taken now to remove current barriers and ensure that eligible Americans can efficiently claim these credits,” said BPC Senior Associate Director of Economic Policy Rachel Snyderman. “With the Inflation Reduction Act’s significant IRS investment, there is an opportunity to improve and support these programs that touch millions of Americans and have long-standing records of success and bipartisan support.” 

Many workers and families are living on the razor’s edge, and it is critical to ensure the households that most need the CTC and EITC are able to claim them. Complexity of the claiming process, misunderstanding of eligibility criteria, and other barriers deter many eligible tax filers from claiming these benefits. At the same time, erroneous payments are common for both credits and threaten to erode support.  

Read the full report here.