What the study found
Advance tax credits can lead to repayment obligations when recipients receive more than they are ultimately entitled to. The study reports that these repayments usually happen when income increases move people across credit phaseouts, or the income ranges where benefits are reduced.
Why the authors say this matters
The authors say policymakers have limited information about these repayments, their distributional impact, and the cost of repayment protections. The study suggests an approach for evaluating advance tax credit proposals and notes that advancing credits can contribute to noncompliance.
What the researchers tested
The researchers estimated repayment patterns, distributional impact, and the cost of repayment protections using tax data. They examined four advance credits: health-insurance premium tax credits, child tax credits, earned income tax credits, and stimulus checks.
What worked and what didn't
The study found that advance credit repayments usually result from income increases across phaseout ranges. Credits aimed at lower-income families have phaseouts that affect many people with income increases, which is associated with higher repayment rates.
What to keep in mind
The abstract does not provide numerical estimates in the available summary. It also does not describe the size of the distributional effects or the specific costs of repayment protections.
Key points
- Advance tax credits may require recipients to repay excess amounts.
- Repayments usually occur when income rises across a credit phaseout range.
- Credits targeting lower-income families have higher repayment rates because many recipients experience income increases.
- The study analyzed health-insurance premium tax credits, child tax credits, earned income tax credits, and stimulus checks.
- The authors say policymakers have limited information about repayment effects and repayment protections.
Disclosure
- Research title:
- Advance tax credits can create repayment obligations
- Authors:
- David Splinter, James Elwell, Lin Xu
- Publication date:
- 2026-03-01
- DOI:
- 10.1086/737017
- OpenAlex record:
- View
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