Refundable Credit Outreach for Departments of Revenue: Reaching Families Who Do Not Know They Qualify

Somewhere in every state, there is a family that qualifies for a refundable tax credit worth hundreds or even thousands of dollars and will never receive it, not because they were denied, not because they were ineligible, but because no one ever told them in a way they understood that the money was theirs to claim. This is among the quieter failures of public administration. There is no denial letter, no rejection notice, no adverse decision to appeal. There is simply silence where a benefit should have been, and a family that continues to live without resources the legislature intended for them to have.

Refundable tax credits, including state versions of the earned income tax credit, child tax credits, child and dependent care credits, and a range of other targeted credits that many states have enacted to support working families, represent some of the most effective anti-poverty tools available to state governments. Unlike deductions, which reduce taxable income and therefore provide greater benefit to higher earners, refundable credits put money directly into the hands of lower and moderate income families, often in amounts that meaningfully affect household budgets. The evidence on outcomes associated with these credits, from improved childhood health and educational outcomes to reduced housing instability, is substantial. The policy intention behind these credits is not in question. What is in question, state after state, is whether the families of these credits were designed to help actually know the credits exist.

State departments of revenue occupy a unique and underappreciated position in this gap between policy intention and lived outcome. They are the agencies that process the tax returns through which these credits are claimed. They have access to data that can reveal patterns of underclaiming. They administer the systems, forms, and instructions that determine whether a family who files a return successfully claims the credit they are entitled to or files without claiming it because the credit was never mentioned to them, or was mentioned in language they could not parse, or required a step in the filing process that they did not understand was necessary.

This article examines how state departments of revenue can build refundable credit outreach communication that reaches the families most likely to qualify but least likely to know it. It addresses the specific populations most at risk of underclaiming, the plain-language and trusted-messenger strategies that close the awareness gap, the partnership structures that extend an agency’s reach into communities it cannot access through standard channels, and the design principles that turn a credit’s mention on a tax form into a benefit a family actually receives.

Why Refundable Credits Go Unclaimed

The pattern of refundable credit underclaiming is well documented across multiple credit types and multiple states, and the reasons behind it cluster into a consistent set of explanations that have less to do with eligibility complexity and more to do with communication failure. Understanding these reasons in detail is the foundation for designing outreach that actually closes the gap, rather than outreach that simply restates the existence of the credit in the same way it has always been communicated.

The most basic reason credits go unclaimed is that the eligible family does not know the credit exists. This sounds almost too simple to be the primary driver of a significant policy gap, but evidence from credit awareness studies consistently shows that a substantial share of eligible non-claimants have never heard of the specific credit they qualify for. They may know that tax credits exist in a general sense, but they do not know that a credit with their specific name, eligibility structure, and claiming process is available to them. A credit that exists in statute, is described in the instructions for a tax form, and is occasionally mentioned in agency press releases is not, from the perspective of a family who does not regularly engage with detailed tax guidance, a credit that they know about.

A second major driver of underclaiming is the misperception that filing a tax return is unnecessary or not worthwhile for families with very low income. Many of the families most likely to qualify for the largest refundable credits have income low enough that they are not required to file a federal or state tax return at all. Without a filing requirement compelling them to engage with the tax system, these families may never file, and a credit that can only be claimed by filing a return that the family has no independent obligation to file goes unclaimed simply because the family never files at all. This non-filer population represents one of the most significant and most difficult-to-reach segments of the eligible-but-unclaiming population.

A third driver is the assumption among eligible families that they do not qualify, often based on an inaccurate understanding of the credit’s eligibility criteria. A family that believes a credit is only available to households with children may not realize that some credit structures extend partial eligibility to workers without qualifying children. A family that assumes a credit requires a specific filing status, a specific minimum income, or a specific employment arrangement may exclude themselves from claiming a credit that does not actually carry that requirement. These misperceptions are often the product of partial information, secondhand accounts from friends or family who may have outdated or incorrect understanding of the rules, or oversimplified descriptions in informal communication that did not accurately convey who actually qualifies.

A fourth driver, and one that disproportionately affects working families with complex employment situations, is uncertainty about how to document or report income that does not arrive through a standard employer-issued tax form. Gig workers, cash-based workers, workers with multiple part-time jobs, and self-employed individuals with informal business arrangements may not know how to accurately report their income in a way that allows them to claim a credit that depends on earned income calculations. These families may avoid filing altogether out of uncertainty about how to handle their specific income situation, even though many of them would qualify for substantial credits if they filed correctly.

The Compounding Effect of Tax Preparation Costs and Access Barriers

Even among families who know a credit exists and believe they qualify, the practical barriers to filing a return can prevent successful claiming. Commercial tax preparation services charge fees that can consume a significant portion of a low-income family’s refund, creating a disincentive to file through a paid preparer even when the family does not feel confident preparing their own return. Families without reliable internet access or a computer may find it difficult to use free online filing tools that require a digital interface. Families with limited English proficiency may struggle to complete a return independently and may not have access to a tax preparer who speaks their language. Each of these access barriers compounds the awareness gap, meaning that even successful outreach that informs a family about a credit does not guarantee that the family can successfully navigate the filing process needed to claim it.

This is why effective refundable credit outreach cannot stop at awareness. An outreach strategy that tells eligible families about a credit but does not connect them to free, accessible, and trustworthy filing assistance has completed only part of the work needed to convert eligibility into an actual claimed benefit. The most effective state outreach programs treat awareness and access as two halves of the same strategy, building communication that simultaneously informs families about the credit and directs them to the specific resources, such as free filing assistance sites, that can help them complete the filing process successfully.

Plain Language as the Foundation of Credit Awareness

The language used to describe refundable credits in official state communication is frequently a significant barrier to the awareness the communication is intended to create. Credit names themselves can be confusing. A state earned income tax credit that is structured as a percentage of the federal credit may be described using language that assumes the reader already understands what the federal credit is and how percentages of it are calculated. A child tax credit that has specific income phase-out ranges, specific qualifying child definitions, and specific interactions with other credits may be described in instructions that read more like a legal definition than a plain explanation of who benefits and by how much.

Plain-language credit communication starts from the outcome the family cares about, not the mechanics of the credit’s calculation. A family does not need to understand the statutory percentage relationship between the state and federal earned income tax credit to decide whether the credit is worth pursuing. They need to know that if they worked and earned income last year, and if their income falls within a certain range, and if they have qualifying children or, in some cases, even if they do not, they may be eligible for a credit that could put a specific range of dollars into their pocket when they file. Leading with the practical outcome and the basic eligibility signal, rather than the technical structure of the credit, is the single most important plain-language shift that state revenue agencies can make in their credit communication.

Specificity about dollar amounts is one of the most powerful and most underused tools in refundable credit communication. A communication that says you may qualify for a tax credit is far less motivating than one that says working families with two children and income under a specific threshold received an average credit of a specific dollar amount last year. Specificity makes the abstract concept of a tax credit concrete and gives the family a basis for deciding whether pursuing the credit is worth their time and effort. Agencies that have access to average claim amounts by family size and income range should use that data prominently in their outreach materials rather than relying on generic statements that a credit may provide meaningful relief.

Eligibility communication should also be framed inclusively rather than restrictively. Many official credit descriptions begin by listing exclusions and limitations before explaining who qualifies, which can lead a reader who falls into a gray area to assume they are excluded when they may actually qualify. A plain-language approach leads with the inclusive framing: if you worked last year and your income was below a certain amount, you may qualify, even if you do not have children, even if you are self-employed, even if you only worked part of the year. This framing invites the reader to consider their own eligibility rather than discouraging them with a list of exceptions before they have understood the basic structure of who the credit is designed to help.

Avoiding the Common Plain-Language Failures in Credit Communication

State revenue agencies that have attempted to improve their credit communication often make a specific and avoidable error: they simplify the language of the existing notice or form instruction without restructuring the underlying communication strategy. A shorter version of a confusing explanation is still a confusing explanation, just with fewer words. True plain-language credit communication requires rethinking what information the family actually needs at the moment they encounter the communication, not simply trimming the existing text.

A second common failure is communicating eligibility criteria without communicating the claiming process. A family that understands they qualify for a credit but does not understand that claiming it requires filing a specific schedule or form attached to their return, or that requires answering specific questions on the main return form correctly, may file a return that does not actually claim the credit they are entitled to. Plain-language communication about refundable credits should always connect the eligibility explanation directly to the specific action required to claim the credit, ideally in the same sentence or the same short paragraph, so that the family understands not only that they qualify but exactly what they need to do to receive the benefit.

Trusted Messengers and the Limits of Direct Agency Communication

State departments of revenue can produce excellent plain-language credit communication and still fail to reach a significant portion of the eligible population, because the channels through which that communication is distributed do not reach the families who most need it. A press release, a website page, and a notice attached to a tax form all depend on the recipient already being engaged with the tax system or with official government communication channels. For non-filers, for families with limited digital access, for families who distrust government communication, and for families who simply are not in the habit of reading official notices closely, these channels are insufficient regardless of how well-written the content is.

Trusted messenger strategies recognize that information delivered by a source the recipient already trusts is more likely to be received, believed, and acted upon than the same information delivered by an unfamiliar government source. A family that hears about a tax credit from their child’s school, their church, their pediatrician, their employer, or a community organization they already rely on for other services is more likely to act on that information than if they encountered the same information through a state agency press release. The trusted messenger strategy is not a replacement for direct agency communication. It is an extension of that communication through channels that have a relationship with the family the agency does not have.

Identifying the right trusted messengers requires understanding where the target population already goes for information and assistance. For families with young children, schools, pediatric health providers, early childhood education programs such as Head Start, and the Special Supplemental Nutrition Program for Women, Infants, and Children commonly known as WIC are natural points of contact because eligible families with children are already engaging with these institutions regularly. For working adults without children who may qualify for a more modest credit, employers, workforce development centers, and unemployment insurance offices represent natural channels because these institutions interact with the working population the credit is designed to reach. For non-English speaking families, immigrant-serving organizations, ethnic media outlets, and faith communities organized around specific cultural or linguistic identities represent essential trusted messenger channels.

Building Effective Partnerships With Trusted Messenger Organizations

A trusted messenger partnership is most effective when it provides the partner organization with materials and information that fit naturally into the services the organization already provides, rather than asking the organization to take on an entirely new function of tax education. A pediatric clinic is not well positioned to become a tax preparation resource, but it is well positioned to display a simple flyer in its waiting room, hand out a one-page credit awareness card during a routine visit, or include a brief mention of available tax credits in materials it already distributes about other family support resources.

State revenue agencies should develop a tiered set of partner materials that match the level of engagement different organizations are able to provide. A basic awareness flyer, available in multiple languages and designed for display or distribution without requiring staff training, serves organizations that can offer only minimal additional engagement. A more detailed referral guide that explains the credit eligibility criteria in slightly more depth and identifies where families can go for free filing assistance serves organizations whose staff have more direct contact with families and can answer basic questions or make referrals. A trained ambassador program that equips committed partner staff with deeper credit knowledge and the ability to answer detailed eligibility questions serves organizations that have the capacity and interest to take on a more substantial role in credit outreach.

Materials provided to trusted messenger partners should be updated regularly to reflect current credit amounts, eligibility thresholds, and filing deadlines, and partners should be given a clear and easy way to confirm they are using the most current version. A partner organization that distributes outdated materials with incorrect dollar amounts or eligibility criteria can inadvertently undermine the credibility of the outreach effort, so maintaining current materials and a reliable update process is an essential operational component of a trusted messenger strategy.

Reaching Non-Filers Specifically

Non-filers, meaning eligible individuals and families who do not file a tax return at all because their income falls below the filing requirement threshold, represent the single hardest population to reach with refundable credit outreach, precisely because they have no existing point of contact with the tax system. A family that has never filed a return, has no relationship with a tax preparer, and does not receive any tax-related correspondence has no natural touchpoint through which a state revenue agency’s standard communication channels can reach them.

Effective non-filer outreach requires identifying alternative data sources and alternative channels that can reach this population without depending on a tax filing relationship. State agencies that administer other public benefit programs, including Medicaid, the Supplemental Nutrition Assistance Program, Temporary Assistance for Needy Families, and housing assistance programs, often interact with populations that overlap significantly with the non-filer population eligible for refundable tax credits. Building data-sharing and outreach coordination agreements with these benefit-administering agencies, where privacy and legal constraints allow, can enable targeted outreach to households that are known to have low income and may be eligible for a credit but have no independent tax filing relationship.

Community-based outreach events, including benefit access fairs, back-to-school events, health fairs, and other community gatherings that draw populations likely to include eligible non-filers, are an important channel for reaching this group. A state revenue agency that participates in these events, whether directly or through a trained community partner, with materials specifically designed to explain that filing a return, even when not legally required, can result in receiving a substantial refundable credit, can reach families who would never have encountered this information through standard tax season communication.

Outreach to non-filers should also explicitly address the misperception that filing is only for people who owe taxes or who are required to file. A communication that says even if you are not required to file a tax return, you may be eligible for a refund through tax credits if you file directly counters the misperception that prevents many eligible non-filers from ever considering filing. This message needs to be repeated across multiple touchpoints because the misperception it is countering is deeply ingrained and unlikely to be corrected through a single exposure to the correct information.

The Role of Simplified Filing Options for Non-Filers

Beyond awareness, non-filers face the practical challenge of completing a tax filing process that was designed primarily for filers with more complex tax situations. Simplified filing tools, whether offered directly by the state, through free federal filing portals where state credits can be claimed in conjunction with a federal filing, or through community-based free filing assistance programs, reduce the practical burden on non-filers who decide to pursue a credit they have learned about through outreach. Communication that pairs the awareness message with a clear, specific path to a simplified filing option significantly increases the likelihood that awareness translates into a successfully claimed credit.

Timing Refundable Credit Outreach for Maximum Effect

The timing of refundable credit outreach significantly affects its impact, and many state agencies concentrate their outreach efforts almost entirely within the standard filing season, missing opportunities to build awareness earlier in the year when families are more receptive to general financial information and less burdened by the immediate pressure of an approaching filing deadline. A year-round outreach strategy that builds awareness incrementally, with reinforcement at key moments throughout the year, produces stronger results than a concentrated burst of communication in the weeks immediately before the filing deadline.

Early outreach, conducted in the months before filing season begins, can focus on building general awareness that a credit exists and roughly who qualifies, without requiring the family to take immediate action. This early awareness-building reduces the cognitive load during filing season itself, when the family encounters the more detailed and action-oriented outreach that directs them to specific filing resources. A family that has already heard about the credit earlier in the year is more receptive to filing-season outreach that asks them to take concrete action, because the concept is no longer entirely new to them.

Outreach timed around specific life events can be particularly effective because it reaches families at moments when their attention to financial matters is heightened. The birth of a child, a new job, a divorce or separation that changes household composition, and the start of the school year are all moments when families are already thinking about their financial situation and may be more receptive to information about tax credits that could affect them. Partnering with institutions that interact with families at these moments, such as hospitals at the time of a birth or school districts at the start of the academic year, allows the state agency to deliver credit information at a moment of heightened relevance.

Reminder communication as the filing deadline approaches should escalate in specificity and urgency, similar to the multi-touch approach used in other tax communication contexts. An early reminder might simply restate the credit’s existence and the approaching deadline. A mid-period reminder might add specific information about free filing resources and their locations or access points. A final reminder, in the days immediately before the deadline, should give the family the most direct and immediate path to action, including specific information about same-day or walk-in filing assistance options if available.

Measuring Refundable Credit Outreach Effectiveness

State revenue agencies that invest in refundable credit outreach should measure the effectiveness of that investment through metrics that reflect actual claiming behavior, not simply outreach activity. The number of flyers distributed, partner organizations engaged, or website visits generated are useful process metrics, but they do not directly demonstrate whether the outreach succeeded in its ultimate goal of increasing the number of eligible families who successfully claimed the credit.

Claim rate analysis, comparing the number of credits claimed in a given filing season to estimates of the eligible population based on income and demographic data, is the most direct measure of whether outreach efforts are closing the awareness and access gap. Agencies that can analyze claim rates by geographic area, demographic group, or filing channel can identify where underclaiming remains most significant and target future outreach investment accordingly. A geographic area with persistently low claim rates relative to its estimated eligible population, despite general statewide outreach, may need a more intensive, locally tailored outreach strategy involving specific community partners in that area.

Tracking referrals from specific outreach channels and partner organizations to free filing assistance resources provides another useful measure of outreach effectiveness. An agency that can track how many families came to a free filing site because they saw a specific flyer, heard about the credit from a specific community partner, or responded to a specific outreach campaign can evaluate which channels and messages are producing the strongest results and reallocate resources toward the most effective approaches.

Surveying families who use free filing assistance about how they learned about the credit and the filing resource provides qualitative insight that claim rate data alone cannot capture. Understanding which messages resonated, which messengers were most trusted, and what barriers families overcame or still face in claiming the credit gives the agency the kind of detailed feedback needed to continuously refine its outreach strategy rather than repeating the same approach indefinitely regardless of its actual effectiveness.

Strategic Communication Support for State Departments of Revenue

Closing the gap between refundable credit eligibility and actual claiming is one of the highest-leverage communication investments a state department of revenue can make, both because the dollar impact on eligible families can be substantial and because the population most affected by underclaiming is disproportionately the population the credit was specifically designed to help. Building an outreach strategy that genuinely reaches this population requires a level of communication sophistication that goes well beyond updating the language on a tax form instruction sheet.

A structured communication assessment of a state’s refundable credit outreach program typically identifies a consistent set of gaps: credit communication that is accurate but written in language that assumes prior tax knowledge, outreach concentrated entirely within the standard filing season with little year-round awareness building, limited or no coordinated trusted messenger partnerships with the community organizations most likely to reach non-filers and underserved populations, multilingual materials that are incomplete or inconsistent with the English-language materials, and no systematic measurement of claim rates by geography or demographic group that would allow the agency to target its outreach investment where it is most needed.

Stegmeier Consulting Group (SCG) helps state departments of revenue design and implement refundable credit outreach programs that reach the families most likely to qualify but least likely to know it. That support may include plain-language credit communication development, trusted messenger partnership strategy and material design, non-filer outreach strategy, multilingual communication development, outreach timing and sequencing design, claim rate measurement frameworks, and community partner training and toolkit development.

The goal of this work is a refundable credit outreach system in which the legislature’s intent to support working families through these credits is actually realized in the lives of the families the credits were designed to help, not only in the lives of the families who happened to already know the credits existed. That goal represents one of the most direct and meaningful equity investments a state department of revenue can make.

Future Trends in Refundable Credit Outreach

The landscape of refundable credit outreach is evolving as states gain access to better data, develop more sophisticated targeting capabilities, and respond to growing political and public attention to the underclaiming problem. Several trends are shaping the direction of that evolution.

Pre-filled or simplified filing options that use data the state already has access to, such as wage data reported by employers, to pre-populate a significant portion of a low-income filer’s return are expanding in some states and at the federal level. These tools reduce the practical filing burden that prevents some eligible non-filers from claiming credits they qualify for, and they shift the outreach communication challenge from explaining a complex filing process to explaining a simplified one and directing eligible families to use it.

Data-informed targeted outreach, using available income and demographic data to identify specific households or neighborhoods with high concentrations of likely-eligible non-claimants, is becoming more feasible as state data analytics capabilities improve. This allows agencies to direct a greater share of their outreach resources toward the populations and locations where underclaiming is most significant, rather than distributing outreach evenly across the entire state regardless of where the need is concentrated.

Digital and social media outreach is becoming an increasingly important channel for reaching younger working adults and families who may not engage with traditional print or broadcast outreach but who are active on social media platforms. Targeted digital advertising that reaches specific demographic and geographic segments with credit awareness messaging, paired with clear calls to action directing recipients to filing resources, represents a growing component of state outreach strategies, particularly for reaching populations that may not be well served by the community partner channels that work effectively for other segments of the eligible population.

Finally, cross-state and cross-program coordination on refundable credit outreach is increasing as states recognize that many of the same trusted messenger organizations, the same non-filer populations, and the same communication challenges exist across state lines. Multi-state coalitions that share effective outreach materials, evaluation data, and trusted messenger partnership models allow individual states to benefit from approaches that have been tested and refined elsewhere, accelerating the improvement of outreach effectiveness without requiring every state to independently develop its own strategy from the ground up.

Conclusion

Refundable tax credits represent a deliberate policy choice to put resources directly into the hands of working families who need them most. That policy choice is only as effective as the communication system that connects eligible families to the credits the legislature created for them. A family that qualifies for a substantial credit but never claims it because they did not know it existed, did not understand they were eligible, or could not navigate the filing process needed to claim it has experienced a policy failure, even though no formal denial ever occurred.

State departments of revenue that invest seriously in plain-language credit communication, trusted messenger partnerships, non-filer outreach, and continuous measurement of claim rates are not simply running a public awareness campaign. They are completing the policy intention that the legislature began when it created the credit. The gap between eligibility and claiming is closeable, and the agencies that close it most effectively are the ones that treat refundable credit outreach as a core strategic function deserving the same investment and rigor as any other major compliance or service initiative.

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State departments of revenue need refundable credit outreach systems that reach eligible families wherever they are, including non-filers who have no existing relationship with the tax system. That means plain-language communication that leads with practical outcomes and specific dollar amounts, trusted messenger partnerships with schools, health providers, and community organizations that already have the family’s trust, year-round outreach timing rather than filing-season-only campaigns, multilingual and culturally relevant materials, and claim rate measurement that identifies where underclaiming remains concentrated.

SCG helps state departments of revenue design refundable credit outreach programs that close the gap between policy intention and family outcomes. Whether your agency needs plain-language credit communication development, trusted messenger partnership strategy, non-filer outreach design, multilingual material development, or claim rate measurement frameworks, SCG can help you build a system that ensures the families these credits were designed for are the families who actually receive them.

Use the form below to connect with our team and explore how strategic refundable credit outreach can help your agency reach eligible families, increase voluntary participation, and deliver on the policy promise these credits represent.