Roughly one in five workers who earn enough to qualify for the Earned Income Tax Credit walk away from the money every year. For Tax Year 2022, the national participation rate stood at 80.8%, meaning 19.2% of eligible taxpayers never filed a claim. That gap has persisted for more than two decades, and with the 2026 filing season now open, millions of low-income households are again at risk of leaving thousands of dollars uncollected.
Why the EITC participation gap still costs workers billions
The Earned Income Tax Credit is one of the largest federal cash supports available to low-income working families, often worth several thousand dollars per household. Yet the IRS has long acknowledged that about one in five eligible taxpayers do not claim it. The National Taxpayer Advocate repeated that estimate in a January 2026 blog post marking EITC Awareness Day, observed each year on January 23. The persistence of this shortfall raises a direct question: could a simple, targeted intervention close the gap?
One hypothesis worth testing is whether the IRS could send postcard reminders to non-filers identified through its matched records with the Census Bureau, aiming to raise take-up by at least five percentage points in a single tax year. The IRS and Census Bureau already collaborate on a data-matching methodology that estimates who qualifies but does not file. A joint working paper published through the Census Bureau in 2024 describes that IRS–Census match methodology for Tax Year 2021. If the agency already knows which households are missing out, the barrier to a postcard experiment is administrative will, not data availability.
Two decades of IRS and GAO data confirm the shortfall
The 19.2% non-claiming rate for Tax Year 2022 is not an outlier. IRS data published on its state participation page show figures that cluster around the same range, with some states performing significantly worse than the national average. The agency also maintains a broader framework for measuring underclaims across multiple credits and deductions through its credits gap research, which links to the methodology used to estimate how many eligible taxpayers fail to claim available benefits.
The problem predates the current data by a wide margin. A Government Accountability Office review, cataloged as GAO‑02‑290R and available through a GAO report, found that EITC participation hovered in the mid‑70% range during the period it studied and that millions of eligible households did not claim the credit. In other words, the participation rate has actually improved since then, rising from roughly 75% to about 81%, but the remaining gap has proven stubbornly resistant to further progress. Two decades of incremental gains have still left nearly one in five eligible workers on the sidelines.
Missing data and untested outreach strategies
Several critical pieces of information remain absent from the public record, making it hard to evaluate which outreach strategies would work best. The IRS publishes overall participation estimates and state-level rates, but not a detailed breakdown of who is missing out by income band, family structure, or geography beyond broad categories. Without more granular statistics, policymakers and community organizations are left to infer where non-claiming is most severe, rather than targeting specific populations with evidence-based campaigns.
There is also little publicly available evaluation of past EITC outreach efforts. Each January, the agency and its partners promote EITC Awareness Day through press releases, social media posts, and local events. However, there is no clear, publicly documented record of which messages were tested, how many potential claimants were reached, or how much participation changed in response. That lack of outcome data makes it difficult to determine whether traditional awareness campaigns are simply not powerful enough, or whether they are being deployed in ways that miss the hardest-to-reach households.
Postcard reminders, text messages, and other direct nudges remain largely untested at scale in the EITC context, even though similar approaches have boosted participation in retirement savings plans and public benefit programs. Because the IRS already has mailing addresses and, in many cases, prior-year filing histories, it is uniquely positioned to run randomized experiments that compare different messages, formats, and timing. Yet without a public commitment to experimentation, the agency continues to rely on broad awareness pushes that may not move the remaining 19%.
Designing a low-cost postcard experiment
A well-designed postcard trial would start with the IRS–Census matched list of likely-eligible non-filers. From that universe, the agency could randomly assign households to receive different versions of a short, plain-language notice explaining potential eligibility, estimated benefit size, and simple steps to claim the credit. One group could receive no postcard, serving as a control. Another might get a basic reminder, while additional groups test variations that emphasize deadlines, dollar amounts, or the ease of free filing options.
The key outcome would be whether recipients go on to file a tax return claiming the EITC during the same season. Because the IRS already processes those returns, it could track results without adding new reporting burdens. If even one postcard version raises participation by several percentage points compared with the control group, the agency would have a strong case for scaling that message nationally in subsequent years.
Importantly, a postcard experiment would not replace broader outreach by community groups, volunteer tax preparation sites, or state agencies. Instead, it would complement those efforts by providing a low-cost, data-driven tool that can be targeted precisely to households the IRS already suspects are missing out. For workers who are disconnected from traditional services, a simple notice in the mail may be the only timely reminder they receive.
After more than twenty years of knowing that one in five eligible workers never claims the Earned Income Tax Credit, the central challenge is no longer diagnosing the problem. The data from the IRS and GAO confirm the persistence of the gap. What is missing is a willingness to test concrete, scalable solutions. A carefully evaluated postcard campaign would not solve every barrier to participation, but it would offer a rare opportunity to turn administrative data into higher take-up and, for millions of families, much-needed cash.
Warren Cohen is a finance writer based in Phoenix, Arizona, covering personal finance topics including credit, banking, and beginner investing. He earned his degree in business administration from Arizona State University and began his career working in consumer finance, where he gained direct experience with lending and credit systems. He now writes for personal finance websites and fintech platforms, focusing on clear, practical content that helps readers make informed financial decisions.
