The benefits of saving at tax time: Evidence from the $aveNYC evaluation

• We evaluate a tax-time savings program using a longitudinal quasi-experimental design.
• Seventy percent of program participants saved a portion of their refund for a full year.
• Participants were less likely than comparison group skip a bill or take out a loan.
• Participants were more likely to withdraw from savings.
• The above findings suggest that participants may have been more likely to have savings.

Paper presents results of an evaluation of a tax-time savings program. $aveNYC offers incentivized savings accounts to taxpayers filing their taxes at Volunteer Income Tax Assistance (VITA) sites in New York City. Participants who direct-deposited at least $200 of their refund into the account and maintained the balance for a year received 50 cents per dollar saved. A comparison group was drawn from NYC VITA sites where the program was not offered. Propensity score weighting was used to balance the two groups. Study participants (N = 353) were surveyed via telephone halfway through the program, and again 8 months after the program ended. 70 percent of $aveNYC participants surveyed received the match. The majority of those who received the match continued to save some portion of the money. At the second survey, there was no significant difference between groups in savings amount; this finding may be due to measurement limitations. $aveNYC participants were less likely than comparison group members to have skipped paying bills or taken out a loan during the study period, and were more likely to have withdrawn money from savings. Findings suggest that tax-time savings programs can result in sustained emergency savings and prevent reliance on borrowing and unpaid bills.