The Impact of Tax Refund Delays on the Experience of Hardship and Unsecured Debt

49 Pages Posted: 7 Jul 2020

See all articles by Olga Kondratjeva

Olga Kondratjeva

Washington University in St. Louis

Stephen Roll

Washington University in St. Louis

Mathieu Despard

UNC Greensboro; Social Policy Institute

Michal Grinstein-Weiss

Washington University in St. Louis - George Warren Brown School of Social Work

Date Written: June 4, 2020

Abstract

The Earned Income Tax Credit (EITC) provides substantial financial support to low-income workers, 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, we investigate how delayed tax refunds affected the experience of hardship and unsecured debt among EITC recipients. We find that early filers experienced increased food insecurity relative to later filers after the implementation of the refund delay.

Keywords: Tax Refund Delay, PATH Act, Earned Income Tax Credit, Material Hardship, Medical Hardship, Food Insecurity, Unsecured Debt

JEL Classification: D10, G50, H24, I38, M38

Suggested Citation

Kondratjeva, Olga and Roll, Stephen and Despard, Mathieu and Grinstein-Weiss, Michal, The Impact of Tax Refund Delays on the Experience of Hardship and Unsecured Debt (June 4, 2020). Available at SSRN: https://ssrn.com/abstract=3619125 or http://dx.doi.org/10.2139/ssrn.3619125

Olga Kondratjeva

Washington University in St. Louis

Stephen Roll (Contact Author)

Washington University in St. Louis ( email )

One Brookings Drive
Campus Box 1208
Saint Louis, MO MO 63130-4899
United States

Mathieu Despard

UNC Greensboro ( email )

PO Box 26170
Greensboro, NC 27402
United States
9193587162 (Phone)

HOME PAGE: http://matdespard.wp.uncg.edu/

Social Policy Institute ( email )

One Brookings Drive
Campus Box 1208
Saint Louis, MO MO 63130-4899
United States

Michal Grinstein-Weiss

Washington University in St. Louis - George Warren Brown School of Social Work ( email )

St. Louis, MO 63130
United States

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