Financial Instability in the Earned Income Tax Credit Program

Can Advanced Periodic Payments Ameliorate Systemic Stressors

Bibliographic Data

ID12438481
AuthorsAndrew J Greenlee (0000-0002-2790-673X, University of Illinois at Urbana–Champaign, Champaign, IL, USA), Karen Kramer (0000-0002-5106-1212, University of Illinois at Urbana–Champaign, Champaign, IL, USA), Karen Z Kramer (0000-0001-8545-0761, University of Illinois Urbana-Champaign), Flavia Cristina Drumond Andrade (0000-0002-3856-3816, University of Illinois Urbana-Champaign), Flavia Andrade (University of Illinois at Urbana–Champaign, Champaign, IL, USA), Dylan Bellisle (0000-0003-2017-4983, The University of Chicago, Chicago, IL, USA), Renee Lemons Blanks (University of Illinois Urbana-Champaign), Renee Blanks (University of Illinois at Urbana–Champaign, Champaign, IL, USA), R Mendenhall (0000-0001-5015-4452, University of Illinois at Urbana–Champaign, Champaign, IL, USA)
Year2020
Volume57
Issue6
Pages1626-1655
Publication date2020-05-27
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueUrban Affairs Review (JOURNAL)
Journal identifiersISSN: 1078-0874 • E-ISSN: 1552-8332
PublisherSAGE Publishing (PUBLISHER • US)
DOI10.1177/1078087420921527
OpenAlexW3030507700
LanguageEN
Citations received2
References cited39

The Earned Income Tax Credit (EITC) serves more than 26 million U.S. tax filers every year. The EITC is distributed annually at tax time; however, past research suggests that lump-sum disbursements leave households with a lack of funds to deal with financial emergencies throughout the year. Drawing upon the data from a pilot program conducted in 2014–2015 in Chicago, this study analyzes how advanced periodic payments help mitigate financial instability for EITC recipients. Interview participants relate that advanced periodic payments result in a reduction in perceived stress, lower levels of debt, fewer unpaid bills, and the ability to engage youth in extracurricular activities. The findings provide a unique perspective on the ways in which low-income households cope with financial instability and stress and suggest that payment frequency options can play a small but important role in the way in which the EITC operates as a support mechanism

Business · Debt · Earned income tax credit · Economics · Labour economics · Payment · Public economics · Stressor · Tax credit · Financial Literacy, Pension, Retirement Analysis · Gender, Labor, and Family Dynamics · Housing, Finance, and Neoliberalism · Finance

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