Increasing Take-up of the American Opportunity Tax Credit

Last registered on January 21, 2022

View Trial History

Pre-Trial

Trial Information

General Information

Title

Increasing Take-up of the American Opportunity Tax Credit

RCT ID

AEARCTR-0005062

Initial registration date

December 19, 2019

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published

December 20, 2019, 11:11 AM EST

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Last updated

January 21, 2022, 12:37 PM EST

Last updated is the most recent time when changes to the trial's registration were published.

Locations

Country

United States of America

Region

Primary Investigator

Name

Mary Clair Turner

Affiliation

Office of Evaluation Sciences

Contact Primary Investigator

Other Primary Investigator(s)

PI Name

Anne Herlache

PI Affiliation

Internal Revenue Service

Contact Investigator

PI Name

Crystal Hall

PI Affiliation

University of Washington

Contact Investigator

PI Name

Bernard Santarsiero

PI Affiliation

University of Illinois at Chicago

Contact Investigator

PI Name

Elizabeth Bell

PI Affiliation

Office of Evaluation Sciences

Contact Investigator

Additional Trial Information

Status

In development

Start date

2019-01-01

End date

2023-02-01

Keywords

Education, Other

Additional Keywords

Behavioral

JEL code(s)

Secondary IDs

Prior work

This trial does not extend or rely on any prior RCTs.

Abstract

To promote college access and affordability, education tax credits help with the cost of higher education by reducing the amount of tax owed by students or their families on their tax return. Yet, many eligible students (and their families) do not claim these credits or use them to offset future college expenses. The Office of Evaluation Sciences (OES) and the Research, Applied Analytics, and Statistics division of the IRS (RAAS) are collaborating to test strategies to increase awareness of higher education financial assistance available through the Federal tax system. The study plans to build evidence on the impact of behaviorally-informed communications on increasing the take up of higher education tax credits, specifically the American Opportunity Tax Credit (AOTC) and, in turn, improving students’ postsecondary outcomes.

External Link(s)

Registration Citation

Citation

Bell, Elizabeth et al. 2022. "Increasing Take-up of the American Opportunity Tax Credit." AEA RCT Registry. January 21. https://doi.org/10.1257/rct.5062-1.2000000000000002

Sponsors & Partners

Experimental Details

Interventions

Intervention(s)

The intervention is a bundle of behaviorally-informed communications (five emails and a flyer mailing).

Intervention Start Date

2019-11-26

Intervention End Date

2020-04-14

Primary Outcomes

Primary Outcomes (end points)

The primary outcome of interest is a dichotomous measure of take-up of the American Opportunity Tax Credit in tax year 2019 captured directly from administrative records.

Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)

Secondary finance and tax-related outcomes include tax filing behaviors (any filing, dependent / independent filer status), and take up of other tax credits (Lifetime Learning Credit and EITC). Additional secondary outcomes include whether the student has signed up an authorized payer and has a financial hold on their account. We will also explore whether the intervention has spillover effects on take up of higher education tax credits (i.e., AOTC) for siblings or other family members. Based on initial findings, we may also explore intervention effects in subsequent tax years.

Secondary academic outcomes include: term-level enrollment (full-time, part-time, not enrolled, withdrawn), date of withdraw; term-level credits (attempted, earned, withdrawn/dropped); term-level GPA (including total institution GPA and transfer GPA), expected graduation date, and degrees conferred.

If available for the full sample, intermediary outcomes related to opening and clicking on tax-related emails from the university and downloading tax-related documents will also be analyzed.

Secondary Outcomes (explanation)

Enrollment outcomes will include both enrollment at the study institution as well as enrollment at other academic institutions captured in administrative data from IRS form 1098-T.

Experimental Design

Individuals will be randomized within blocks. Half of the individuals in the study will be randomized into a business-as-usual condition. The other half of individuals in the study will be randomized to the treatment condition that are sent an additional bundle of behaviorally-informed communications.

Experimental Design Details

Randomization will occur such that 50% of individuals are assigned to the business-as-usual group and 50% of individuals are assigned to the additional communications bundle group (25% in the IRS flyer mailing condition and 25% in the university flyer mailing condition).

The study sample includes undergraduate students enrolled at the university at least half-time in one or more academic period in 2019 (i.e., spring 2019, summer 2019, and fall 2019). International students, undocumented students, students without valid SSNs, and students enrolled in non-degree programs are excluded from the sample frame.

Planned randomization blocks include: year in school as of last enrollment (i.e., first-time freshman in fall 2019, graduated in 2019, transfer students with less than 60 transfer credits, transfer students with 60-119 transfer credits, Sophomore, Junior, or Senior) as well as dichotomous indicators for enrolled at the university in fall 2019 and signed up an authorized payer.

Randomization Method

Randomization will be done by the Office of Evaluation Sciences in an office using Stata code on a computer.

Randomization Unit

The unit of randomization is the individual.

Was the treatment clustered?

Experiment Characteristics

Sample size: planned number of clusters

19,071 students

Sample size: planned number of observations

19,071 students

Sample size (or number of clusters) by treatment arms

9,530 students in the business-as-usual condition
9,541 students in the additional bundle of communications condition (4,765 IRS flyer mailing and 4,776 educational institution flyer mailing)

Minimum detectable effect size for main outcomes (accounting for sample design and clustering)

The minimum detectable effect size for take up of AOTC is 2.0 percentage points (3.4%). This power analysis assumes 80% power, baseline take up of AOTC of 59%, and examines the effect of the pooled treatment (e.g., business-as-usual condition vs. additional bundle of communications condition). Because our primary analysis will include one outcome and pool together treatment arms, it does not adjust for multiple comparisons. The reported minimum detectable effect size is likely an upper bound, because this power analysis does not adjust for expected gains precision from blocking or the inclusion of additional covariates.

Supporting Documents and Materials

IRB