Using Data for Good: Identifying Who Could Benefit from Simplified Tax Filing

For years, New America Chicago has been working with state agencies, national and local advocates and thought leaders, as well as community members on getting beneficial tax credits, like the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC), into the hands of those who need them most. Illinois paved the way recently with its innovative simplified filing initiative which helps residents easily claim their state Earned Income Credit (EIC) by confirming their refund with a prepopulated return.

This past year we had discussions with Illinois policymakers and state agencies, like the Illinois Department of Revenue (IDoR) and the Illinois Department of Human Services (IDHS), to envision new ways for expanding the simplified filing initiative. It is currently designed to reach those who have filed a federal tax return and claimed their EITC, leaving out non-filer households who typically do not file taxes because they earn less than the federal income requirement or have other barriers.

In Illinois, over 600,000 households are enrolled in SNAP, and over 1 million households are enrolled in Medicaid. Every year thousands of families spend countless hours applying for these and other social safety net programs using IDHS' Application for Benefits Eligibility (ABE). Unfortunately, many of these households are most in need of the federal EITC and the recently expanded state EIC but will never receive it. We posed the question, what if Illinois could save families time and money by using that already provided income and household information to streamline access to the state EIC for low-income families that don't normally file taxes?

Our friends at Inclusive Economy Lab (IEL) conducted analysis using Census microdata to estimate the number of Illinois households who are enrolled in Medicaid and SNAP but do not file their federal or state tax forms. We chose these two programs because recipients of these programs are more likely to be eligible for the newly expanded state EIC, but not receive it. According to their analysis, approximately 54,147 households are enrolled in Medicaid or SNAP but do not file income taxes. As a result, these families are not receiving a combined $24.9 million dollars of Illinois EIC payments. The full analysis can be found on IEL's website or by clicking the button below.