Matched dollar incentives for saving tax refunds

Evidence Rating  
Evidence rating: Some Evidence

Strategies with this rating are likely to work, but further research is needed to confirm effects. These strategies have been tested more than once and results trend positive overall.

Health Factors  
Decision Makers
Date last updated

Several programs have piloted efforts to provide matched dollar incentives for individuals to place some or all of their tax refund in a savings account. These programs offer matching deposits up to 100% of the amount saved from tax refunds. Programs usually focus on low and moderate income individuals and families, require a minimum amount placed in savings, and a minimum time period before a deposit can be withdrawn in order to receive matching funds. Programs and matches are typically provided by government entities or nonprofit agencies1, 2.

What could this strategy improve?

Expected Benefits

Our evidence rating is based on the likelihood of achieving these outcomes:

  • Increased asset accumulation

Potential Benefits

Our evidence rating is not based on these outcomes, but these benefits may also be possible:

  • Increased financial stability

What does the research say about effectiveness?

There is some evidence that programs that encourage low and moderate income individuals and families to save tax refunds, such as SaveUSA and $aveNYC, increase savings amounts1, 2, 3. Additional evidence is needed to confirm effects.

Assessments of SaveUSA and $aveNYC, matched savings programs for low and moderate income taxpayers implemented at Volunteer Income Tax Assistance (VITA) sites for several years around 2010, show greater savings among participants than non-participants. A majority of program participants kept deposits in specially designated accounts for at least one year, receiving a 50% dollar match for the pledged amount2, 3, 4.

Specific effects varied from program to program and between tax years. In the first year of both programs, participants had more short-term (non-retirement) savings six months after receiving match dollars than non-participants3, 4, and $aveNYC participants were more likely to have savings to cover one month of expenses than non-participating peers3. Participants in the second year of the $aveNYC program were less likely to have taken out loans or skipped bill payments, and more likely to have withdrawn money from savings than non-participants. However, there was no difference in savings amounts six months after receiving the program match in the second year of $aveNYC2. In the longer term, SaveUSA participants’ savings grew 30% more than non-participants1.

A study of the first year of $aveNYC suggests that financial hardship and limited understanding of program requirements can increase the likelihood that participants close accounts early, withdrawing their money before receiving matched funds5.

Assessments of the Refund to Savings initiative, which does not have a deposit match but uses savings messaging and choice architecture within tax software, suggest that prompts to save higher amounts may increase the amount saved from tax refunds6. Moreover, messaging around saving for emergencies combined with changes to the way refund deposit options are presented may increase the number of individuals that save part of their tax refund7.

Putting part of a tax refund into a savings account may decrease material and health care hardship8.

How could this strategy impact health disparities? This strategy is rated likely to decrease disparities.
Implementation Examples

$aveNYC and SaveUSA were two large pilot matching programs. $aveNYC ran at several VITA sites in New York City in 2009 and 2010. Participants who direct deposited a minimum amount of their refund ($100 in 2009, $200 in 2010) into a designated savings account and maintained their balance for a year received 50 cents per dollar saved (up to $250 in 2009, $500 in 2010)2, 3. SaveUSA, based on the $aveNYC model, was piloted in New York City, Tulsa, San Antonio, and Newark from 2011-2013, and was replicated in Houston, TX4.

Implementation Resources

CFEF-SaveUSA - Cities for Financial Empowerment Fund (CFEF). SaveUSA.

CSD-VITA Toolkit 2015 - Covington M, Oliphant J, Perantie D, Grinstein-Weiss M. The volunteer income tax preparer's toolkit. Washington University in St. Louis. 2015.


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1 MDRC-Azurdia 2016 - Azurdia G, Freedman S. Encouraging nonretirement savings at tax time: Final impact findings from the SaveUSA evaluation. New York: Manpower Demonstration Research Corporation (MDRC); 2016.

2 Tucker 2014 - Tucker JN, Key CC, Grinstein-Weiss M. The benefits of saving at tax time: Evidence from the $aveNYC evaluation. The Journal of Socio-Economics. 2014;48:50-61.

3 Key 2015 - Key C, Tucker JN, Grinstein-Weiss M, Comer K. Tax-time savings among low-income households in the $aveNYC program. The Journal of Consumer Affairs. 2015;49(3):489-518.

4 MDRC-Azurdia 2014 - Azurdia G, Freedman S, Hamilton G, Schultz C. Encouraging savings for low- and moderate-income individuals: Preliminary implementation findings from the SaveUSA evaluation. New York: Manpower Demonstration Research Corporation (MDRC); 2014.

5 Manturuk 2012 - Manturuk K, Dorrance J, Riley S. Factors affecting completion of a matched savings program: Impacts of time preference, discount rate, and financial hardship. The Journal of Socio-Economics. 2012;41(6):836-842.

6 Grinstein-Weiss 2017 - Grinstein-Weiss M, Russell BD, Gale WG, Key C, Ariely D. Behavioral interventions to increase tax-time saving: Evidence from a national randomized trial. Journal of Consumer Affairs. 2017;51(1):3-26.

7 Grinstein-Weiss 2017a - Grinstein-Weiss M, Cryder C, Despard M, Perantie D, Oliphant J, Ariely D. The role of choice architecture in promoting saving at tax time: Evidence from a large-scale field experiment. Behavioral Science & Policy Association. 2018.

8 Grinstein-Weiss 2016 - Grinstein-Weiss M, Despard M, Guo S, Russell B, Key C, Raghavan R. Do tax-time savings deposits reduce hardship among low-income filers? A propensity score analysis. Journal of the Society for Social Work and Research. 2016;7(4):707-728.