From Incentives to Impact: Boosting Earned Income Tax Credit Participation in New Jersey

The Earned Income Tax Credit (EITC) is one of the most effective tools for reducing poverty, providing cash to low-income workers after they file taxes. Yet uptake remains low nationwide, likely due to complex eligibility rules and the fact that many eligible individuals earn too little to be required to file taxes.  

With support from The Tepper Foundation, a family foundation that invests in promising models to increase community well-being in New Jersey and beyond, we explored strategies to get more state residents to file their taxes and claim the credit.  

After examining the state landscape and collaborating with experts like the National League of Cities, we identified New Jersey’s free, IRS-funded Volunteer Income Tax Assistance (VITA) program operators as the ideal partners for this work. Their proximity to and knowledge of the communities they serve made them ideal partners for reaching the state’s low- to moderate-income communities.  

Leveraging their on-the-ground community tax experience, as well as the existing wealth of research on helping more eligible people claim the EITC, we developed five incentive-based pilot strategies to increase EITC uptake in the 2025 tax season: 

1. Run a word-of-mouth campaign to reward both individuals who encourage their friends and family to file at VITA sites and any friends and family who subsequently file — with an extra bonus when the person referred qualifies for the tax credit. VITA operators shared with us that most clients are told about VITA by someone they know; we wanted to test the ability of incentives to motivate more personal referrals. 
2. Encourage more people to try digital filing tools (i.e., “self-file”) to increase capacity for VITA operators, enabling them to focus on filers in most need of support. The IRS-backed digital Direct File tool was available in New Jersey for the first time during the 2025 tax season (the program is now on hold). We sought to seize the opportunity the tool presented to help operators work more efficiently. 
3. Expand geographic access to VITA services by supporting light-touch, hybrid, and pop-up models. VITA programs are not evenly spread throughout New Jersey, and many communities do not have a site nearby. One of our partners held pop-ups in Monmouth County, where VITA services had dropped off in recent years, to increase the program’s reach. 
4. Increase access to VITA for filers who do not speak English by increasing sites’ capacity for multilingual service delivery and translation and by forging new partnerships with trusted community organizations. These efforts sought to overcome language barriers, which our research and conversations with VITA operators found to be key challenges in expanding EITC participation. 
5. Build capacity for VITA sites to process taxes from prior years (aka “back-tax” filing), enabling filers to claim multiple years of credit — including both EITC and 2021 Covid-19 stimulus payments. VITA operators often lack the resources to stay open after the core tax season; our intervention sought to address this challenge. 

For each of these strategies, VITA program operators were given funding to directly incentivize filers. For example, operators distributed gift cards to people who tried self-file and to first-time VITA clients who spoke a language other than English. VITA operators themselves could earn additional payments based on their results, a structure that rewarded effective services while providing data to track impact during the pilot.

The pilot programs began in early 2025, at the start of the tax season. We were thrilled that seven of the ten IRS-funded VITA programs in New Jersey chose to participate  – representing a broad cross-section of New Jersey, from rural Hunterdon County to the highly diverse, urban Newark area.  

By the close of the main tax season on April 15th, these VITA operators had filed over 16,000 returns, helping 4,300 filers claim $7.5M in EITC. These numbers will continue to grow as VITA offers services through the extended tax date, October 15th.  

Insights and Impact 

In June, Social Finance convened the full group of partners – including The Tepper Foundation, VITA partners, the National League of Cities, and New Jersey state representatives – for a community of practice to reflect on the initial data and share learnings.  A few key themes emerged:  

• EITC claims increased across the board. Six of seven participating VITA partners saw their share of filers claiming EITC rise from 21% in 2024 to 24% in 2025. 

• Community trust proved crucial. Misinformation and uneasiness were rampant this tax season, and especially among multi-lingual communities. Strong community relationships and trust helped maintain a steady demand for services.  

• Language access increased impact. The project funded two new translators for the Ironbound Community Corporation (ICC) – one of the sites implementing the VITA program through our partners at the United Way of Greater Newark. ICC was able to offer more tax services in Spanish and Portuguese, enabling them to serve 30% more filers. 

• Self-filing tools opened new possibilities. VITA operators successfully introduced younger, more tech-savvy filers to digital tax filing tools. For example, the United Way of Central Jersey partnered with Middlesex College to hold a self-filing pop-up at a campus computer lab. Incentives were an effective way to get clients to try self-file – and our partners shared that many were amazed by how easy it was. Although the future of the IRS Direct File program is uncertain, self-filing technology will continue to be an important part of the landscape.  

• One-time incentives may create sustainable impact. VITA operators have a high rate of returning clients. Using incentives to bring in new clients — many of whom either may not file or may use costly tax services that eat into their credit return — can change behavior for years to come and produce a domino effect of positive impact down the line.   

• VITA does a lot with a little. VITA operators help thousands of people in their communities file their taxes on extremely thin budgets. When given the chance, they have ideas for how to do even more. One of our partners shared that “to prioritize innovation was a welcomed challenge to increase our reach . . . This experience prodded our creativity, enlivened our work, and most importantly, helped us to serve the community with greater impact than ever before.” 

We’re excited by these results and look forward to supporting our VITA partners through the end of the extended tax season on October 15. Stay tuned for more from Social Finance and our partners about this project, including case studies on each of our five strategies.  

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