Many U.S. households lack savings for unexpected expenses and financial shocks, but tax refunds and the Earned Income Tax Credit offer opportunities to set aside resources for use in emergencies. Understanding what EITC recipients do with their tax refunds is important for guiding federal policy to promote financial stability. This brief summarizes findings on the use of tax refunds by EITC recipients in the Refund to Savings (R2S) initiative. It also examines the use of financial services for saving refunds and the financial shocks experienced by EITC recipients during the 6 months after tax filing.
Project: Refund to Savings (R2S)