Matching Timing To Need: Refundable Tax Credit Disbursement Options

Center on Poverty and Inequality. November 2020. Refundable tax credits are powerful tools for advancing economic security and opportunity, reducing poverty, and improving the lives of families in need. Despite their successes, these tax credits are limited by a key misalignment: unaffordable living expenses, unstable pay, and persistent hardship are experienced consistently or unpredictably throughout the year, unlike the single annual tax credit disbursement. This report provides a framework for policymakers and advocates seeking to create periodic payment options that align tax credit disbursement timing to need and advance economic, racial, and gender equity. The report also outlines specific periodic payment design recommendations for the Earned Income Tax Credit and Child Tax Credit, including flexible disbursement options. https://www.georgetownpoverty.org/wp-content/uploads/2020/11/MatchingTimingtoNeed-Nov2020.pdf