Working together in a cohort model to rapidly improve tax letters
Multi-state: Pennsylvania, Wisconsin, Colorado, Vermont, Oregon, Washington
June 2026 - July 2026
Why This Matters For Families
Across the country, millions of families are living paycheck to paycheck, struggling to afford their basics on low to moderate incomes. To support these families, 31 states and the federal government have instituted the Earned Income Tax Credit (EITC), which can provide families with thousands of dollars after filing their federal and state taxes. Tax credits have become a critical anti-poverty program in the United States, providing an essential source of cash for many American workers and families.
The 2021 expansion of the Child Tax Credit (CTC) in the American Rescue Plan reduced child poverty in the United States by 40% that year. However, accessing credits like the CTC is notoriously difficult as they are claimed during annual tax filing. The bipartisan, highly successful EITC reaches only 80% of eligible households nationwide, with lower-income, less-educated households being most likely to leave money on the table compared to other populations. The IRS estimates that roughly 20% of EITC-eligible and CTC-eligible individuals do not receive the credit payments they are owed — the federal EITC alone averaged almost $3000 in TY24.
Tax filing is an underutilized, and all too often, overlooked benefits delivery system for low-income families. Tax credits offer critical financial benefits to filers, yet tax system administrators are rarely invited into critical conversations about benefits delivery. When state revenue leaders share and learn implementation strategies, everyone involved in the tax system benefits.
Implementation Challenge
For many families, receiving a letter from a taxation agency often brings fear, doubt, or even panic. Well-intentioned letters meant to encourage people to claim tax credits can be misunderstood or ignored because they’re too complicated or appear too good to be true. For government agencies who are resource-constrained, the decision to send outreach letters means careful consideration of conversion rates, cost, and coordination.
As taxation agencies start to do more outreach to increase credit uptake, it’s important that they design these letters to earn trust, build confidence, and reduce anxiety if they hope individuals will take action. This starts with deliberately designing communications that are clear, actionable, and easy to follow.
Our Approach
The New Practice Lab brought together a cohort of six states for four hands-on sessions focused on writing more effective tax credit outreach letters. This work is built on the success of the Tax Credit Implementation Working Group cohort model and was responsive to member interest in taking action and applying lessons learned..
Each state was asked to bring a letter they currently send in their state, to workshop and improve by the end of the series. After a series of learning sessions on topics included understanding filer behavior and common misconceptions about taxes, plain language writing, advanced writing for tricky tax topics, and techniques for usability testing letters with real tax filers, participants got to run their updated letter through a usability testing session with a real tax filer, who gave us her reaction to the states’ new letters. Attendees shared their updated letters with each other in the last session. We also offered office hours in between.
““Sometimes people [in government] assume that you should know these things, but I don’t... It makes me happy knowing that you want to understand more [about] how my brain is working.””
What We Learned
The cohort reinforced that tax agency communications can be accurate and credible without sacrificing clarity or empathy. Small choices in language, structure, and presentation can help residents understand why they are receiving a letter, trust that it is legitimate, and know what action to take next. Designing with residents (including testing communications with real filers) can help agencies identify points of confusion that may be difficult to see from inside the government.
We also learned that a cohort model can be an effective way to provide hands-on support across multiple states at once. Rather than working through similar communication challenges independently, states could learn from one another, apply common principles to their own materials, and see how peers approached similar problems. By working with real letters throughout the sessions, participants were able to translate shared learning into materials they could put into practice.
Next Steps
Participating states are finalizing their outreach letters, with several expected to put the updated materials into use in early 2027. The New Practice Lab will continue to offer participating states targeted support, including content review and recommendations, as they prepare their communications for implementation.
