Tax Credit Implementation Working Group
Multiple States
May 2025 - November 2025
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 $2,500 per return in 2022.
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
Getting public programs approved and funded takes enormous effort, but it's only half the battle. After the bill is signed and the money is appropriated, another challenge awaits: delivering a new service to people that is on time, on budget, and working as expected. Despite the importance of implementation, few mechanisms exist to help public servants stand up new and innovative efforts. Even when no playbook exists, there are strategies to smooth implementation. Loose networks of public servants tasked with similar demands emerge to bridge knowledge gaps, sometimes self organizing into more formal structures designed to share lessons, pitfalls, and solutions. With few spaces for the state teams leading the implementation of tax credit programs to have deeply technical conversations about engineering, data, outreach, and system design, the tax delivery system is missing opportunities for collaboration, information sharing, and reuse between programs.
Our Approach
To create this space for dialogue, the New Practice Lab has brought together a core group of tax administrators to host technical conversations - the goal of these gatherings is to share actionable information between programs, collectively define best practices, and identify opportunities for innovation across the ecosystem.
Beginning in 2025, our initial cohort had the following aims:
To foster an inclusive learning environment between state revenue agencies, NPL, and other partners in the ecosystem;
To create a space that hasn’t existed before, where administrators can share learnings and keep each other motivated;
To pioneer cultural changes that encourage states to try and improve credit uptake interventions;
To make progress on a problem too big for any one state to solve by itself including delivering tax credits to those who miss out and improving the experience for those who already claim.
OBJECTIVE
Create a space for revenue agency staff and the New Practice Lab tax team to learn from one another about credit uptake challenges, innovations, and progress
WHAT WE DID
Hosted six monthly meetings during which each participant had the opportunity to share about their state’s efforts and workshop ideas with other experts
OBJECTIVE
Document and share leading practices for reuse, scale, and adaptation across states
WHAT WE DID
As a cohort, defined priority intervention areas including more precise outreach strategies, data sharing between revenue and benefits agencies, and advance payment of credit to build common resources, toolkits, etc.
OBJECTIVE
Provide technical support to at least 3 state cohort members to pilot an intervention
WHAT WE DID
Worked with 3 states from the cohort so far, and continue to look for ways to support others in 2026
What We Learned
State revenue leaders are eager to connect with each other on these topics. As a group, many are starting to embrace that one aspect of their role, among others, is a benefit administrator. This is a significant cultural shift and impacts approach to tax administration, including leveraging existing practices and data in new ways (such as more proactively identifying those that have over-paid and owed a refund).
It can be validating for tax administrators to connect on similar questions and challenges, and have a community to speak openly and candidly. There are many credit uptake initiatives happening across states to learn from and compare notes.
Next Steps
The cohort is working to identify priority topics for 2026 meetings, and potentially identify pilots that could be implemented in multiple locations to learn from collectively.
