Ensuring Tax Credit Access Should Be Higher Priority for States

With only a couple of weeks left in the 2026 tax filing season, state tax agencies are scrambling to make sure residents know about tax credits on the table. These represent tangible dollars families are entitled to that can go directly into their wallets. Yet Americans miss out on billions of dollars in tax credits every year.

State departments of revenue must do more to bridge this gap in tax credit delivery. And tax season is the right time to connect taxpayers to this critical financial support.

Unlike other public benefits, tax credits are only available to those who file a tax return. Yet the US tax system, complex for most, can be almost impossible to navigate for low-income households for whom tax credits offer the most impact.

Many of these households aren’t required to file taxes because of their income level and may have extended timelines beyond the traditional tax season. However, most resources to help with tax filing, such as the federal Volunteer Income Tax Assistance, expire on or before Tax Day.

Our team’s research last year found that there are significant structural barriers to low-income families filing taxes—gathering of the needed documents, fear of making mistakes, costs of tax preparation services. But even before those barriers, 24% of infrequent tax filers cited lack of tax credit awareness as an obstacle to accessing tax credits.

Many states already use outreach campaigns to educate residents about available credits, a natural starting point given that outreach requires neither policy changes nor extensive investment. And evidence shows that thoughtful campaigns can make a difference.

States can do more to design communications that account for how residents interact with government. These can be relatively low-cost tactics that have outsized impacts on dollars in people’s pockets. Letters and other outreach materials must earn filers’ trust; forgo jargon; and be clear, actionable, and easy to follow.

Some states are leading the way.

Take, for example, Maryland Gov. Wes Moore (D) and Comptroller Brooke Lierman’s recent launch of the state’s expanded Earned It Campaign. Last year’s version of the campaign had more than three million touchpoints with taxpayers, returning $519 million in earned income tax credits to 477,000 Marylanders. This year, Maryland is collaborating with more than a dozen state agencies to reach potentially eligible filers.

Instead of relying solely on tax offices, the state is providing tax credit information wherever residents engage with government—from benefit offices and job sites to the Maryland Motor Vehicle Administration.

Working with partners such as the Urban Institute and New Practice Lab, the program has already generated more than six million touchpoints, 350,000 texts and sent 50,000 letters directly to eligible filers who didn’t claim their credits in 2025. Letters from the comptroller’s office aimed to surpass the standard government notification letter—using plain language explanations of complex tax topics and providing easy-to-follow instructions.

Maryland’s success exemplifies the good work government can do to aid taxpayers, especially when every dollar matters to families. The return on investment is undeniable—returning these credits to taxpayers lifts children out of poverty at an impressive rate, and at a marginal cost to the state. Maryland’s annual investment into this outreach program rings in at just $300,000, a small number compared with the state’s $70 billion budget for fiscal year 2026.

We also helped Washington state reach families who received the working families tax credit in one year but missed it previously and supported them in filing. A clear and simple letter mailed to families in November resulted in $9.2 million returned to more than 10,000 Washington families at the end of last year.

Our team’s partnership with the Colorado Department of Revenue went even further—identifying the residents who missed claiming tax credits and proactively pre-populating tax returns to help them access refunds they are owed. In the state’s initial pilot launched at the end of 2025, families were able to submit returns in four minutes on average and refunds have already reached more than 4,500 residents. The program will expand this year.

The key is the state’s use of data generated out of its GenTax program, which helps identify the taxpayers missing out on credits and other refunds. More than 30 states use the same software, meaning this solution is scalable for much of the country. Converting the Colorado “discovery module” within the software could enable other states to implement this approach easily and cheaply.

Programs such as Maryland’s Earned It Campaign and Colorado’s data-driven direct outreach demonstrate the feasibility and fairly minimal resources needed to help families claim the credits they have already earned. True change for taxpayers can be rooted in the smarter, scalable use of the tools we already have available.

By investing modestly in outreach and technology, states can return millions of dollars to working families while strengthening trust in public institutions. In an era defined by affordability challenges and government distrust, ensuring taxpayers receive the benefits they are entitled to may be one of the most practical and important steps governments can take.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law, Bloomberg Tax, and Bloomberg Government, or its owners.

Author Information

Simone Brody is a senior adviser with the New Practice Lab with a focus on tax credit delivery.

Amira Boland is chief of staff at New Practice Lab and previously served as the first-ever lead for federal customer experience at the Office of Management and Budget.

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