Increasing Earned Income Tax Credit Uptake in New Jersey

Every year in New Jersey, more than 200,000 eligible low-income residents don’t claim the earned income tax credit (EITC), collectively leaving nearly $700 million in federal and state credits on the table.¹

To address the underuse of the EITC among qualifying New Jersey residents, Social Finance during the 2025 tax season partnered with IRS-certified Volunteer Income Tax Assistance (VITA) sites throughout the state on pilot programs that incorporate incentive payments for filers and outcomes-based rewards for VITA locations.

This work was funded through an investment from The Tepper Foundation.

Goals

• Increase EITC uptake in New Jersey
• Multiply the impact of philanthropic investments using outcomes-based financing
• Highlight learnings on effective strategies to increase EITC uptake and improve access to high-quality, free tax preparation

The Work

• Piloting strategies for implementation that:
  • Leverage word-of-mouth referral campaigns to reward both referrals and new filers at VITA sites, with bonus payments for EITC-eligible referrals.
  • Expand self-file methods to increase capacity for VITA operators to focus on those needing hands-on support.
  • Broaden geographic reach for VITA using light-touch, hybrid, and pop-up models in new communities.
  • Increase access for non-English filers through increased outreach, service delivery capacity, and partnerships with trusted community organizations.
  • Expand capacity for back-tax filing, giving more chances for filers to claim credits from prior years, including both EITC and, for the final time in 2025, the 2021 Covid-19 stimulus payments.
• Designing with a performance-based approach. The pilot initiatives reward both filers and VITA sites for increasing uptake. Payments are distributed to new filers and EITC claimants, existing clients referring friends, and VITA operators that achieve key outcomes, e.g., increases in new clients.
• Building a stakeholder network. Creating partnerships within New Jersey and beyond to highlight learnings and raise awareness about how the EITC is vital to combating poverty and how VITA sites are essential community resources.

1. New Jersey Department of the Treasury, 2024.