People living in rural areas are among the groups most at risk of missing out on tax credits they are eligible for, including the federal earned income tax credit (EITC). Many may face unique challenges to accessing trusted information and tax filing services. As a result, they could be leaving thousands of dollars on the table – money that could otherwise help pay for housing, groceries, and child care, or be saved for the future.

This pattern holds true at the state level as well. As part of our ongoing research to help Maryland connect underserved residents to crucial state tax credits, we analyzed credit uptake gaps, interviewed government and non-profit leaders, and conducted focus groups. Our findings offer valuable lessons for state leaders seeking to improve access to tax credits in rural areas.

Maryland leaders: build community trust and boost in-person services

We spoke with government and non-profit leaders in Maryland, many of whom have expertise in working directly or indirectly with rural populations. They identified a lack of trust and absence of long-term relationship building between service providers and rural residents as a primary challenge to increasing credit uptake. They also noted the stigma sometimes associated with asking for help and accessing free services.

“We look for a trusted surrogate community member. Rural communities are very distrustful of outsiders. So usually going to either that trusted nonprofit or in some communities, the faith community that's doing the work […] that's who the communities are gonna follow. But also, being engaged [and] trying to continually have a presence causes their distrust to fall” – Maryland leader

Leaders suggested that in-person gatherings, such as at church events or homes for elderly people, could reach more people in rural areas. Efforts undertaken in partnership with trusted community leaders and local organizations, including schools and home-grown businesses, will have more credibility, too. We also heard from leaders that physical mail may be more effective than digital campaigns in rural areas.

Nearly one in six rural families live in poverty. A Maryland leader noted that the number of free tax preparation services had declined significantly since the COVID-19 pandemic in rural areas of the state. Outreach efforts should therefore make it easier for residents to find and connect with Volunteer Income Tax Assistance (VITA) sites, Low Income Taxpayer Clinics, Taxpayer Assistance Centers, and other qualified tax preparation assistance. Those services could support uptake among the lowest-income earners, in particular, who may not be able to pay for private preparers.

Leaders also noted additional obstacles for those who cannot afford to own or maintain a car, which can be crucial to accessing a variety of taxpayer and other safety net services in low-density areas without public transportation. 

“Someone that doesn't have a car can't go from Princess Anne to Salisbury, you know, 40 miles to get their taxes done […] And I know that in our modern age everybody says, “oh, do Direct File, it's free, it's online and you can do it yourself.” Well, for my population, lot of seniors are not very techno savvy. A lot of them rely on their cousin or niece or nephew.” – Maryland leader

Social service providers in rural settings could centralize resources in a specified “hub area,” allowing clients to access free tax filing supports in tandem with health care, nutrition, and other government services. Doing so would reduce travel time for residents who may not live in high-density areas. 

Maryland residents: local connections and consistency is key to trust and awareness

Kent County, one of Maryland’s rural counties on the Eastern Shore, is among the state’s top six counties with the highest shares of eligible tax filers missing out on the EITC. In the 2023 tax year, one in five of Kent County’s eligible tax filers did not claim the state EITC, slightly higher than the state’s average. (Our analysis does not account for non-filers, so the numbers are likely to be even higher.) 

To get a better understanding of how to increase tax credit uptake in rural areas of Maryland, we partnered with a Kent County community organization to host a focus group. Participants shared that, while they had filed their taxes in the past year, most were unaware of the state-level EITC or child tax credit (CTC) even though they were eligible. 

Those aware of the federal credits learned about them through family and friends’ word-of-mouth. They also noted their trust in official government flyers and resources available in familiar places like doctor’s offices, schools, local businesses, and farmers’ markets.

“I take my kids to the doctor all the time. And sometimes they have brochures on the window when you’re checking in. And I always look at that stuff and sometimes pull one off and take it home, so that would probably [reach] a lot of people. ” – Kent County resident

Focus group participants used paid tax preparers to file their taxes, and they perceived them as highly knowledgeable and worth the cost to ensure accuracy and personal data security. Participants appreciated that their chosen tax preparers took time to sit with them and carefully explained each step. 

“That's the good thing about, you know, going to the same person year after year. It's like you gain a relationship [with them], like you’re really sitting at the table talking, almost like you would to a family member.” – Kent County resident

Participants expressed skepticism about switching to alternative tax preparation services, even if free and conveniently located. One participant noted “if it’s not broke, don't fix it.” 

At the same time, they were unaware of nearby free tax filing services, and suggested the services should be more heavily advertised like online commercial tax preparers are, such as with billboards or TV advertisements. 

Looking ahead

Increasing rural uptake of state tax credits will require trust and tailored outreach and tax filing services. Achieving this goal calls for a long view and purposeful action in working with rural communities.