Refund to Savings 

Michal Grinstein-Weiss

Dan Ariely

Clint Key

Krista Holub

May 2013 
About the R2S Initiative

• Largest saving experiment ever conducted in the United States

o Measuring effect of interventions informed by behavioral economics

o Increasing saving at tax time and building financial security for 

economically vulnerable households

• Developing and testing model for a universal, scalable savings 

policy

• Collaboration of academia with Intuit, leveraging TurboTax 

Freedom Edition
• Universal, Permanent, and Recurring

• Major Financial Event for Households

o Approximately 143 million individual returns filed every year1 

o $338 billion refunded each year2 

o 26.5 million low-income households received nearly $60.7 billion in EITC 

for TY20113

• Golden opportunity

• Evidence from 

asset-building research

Why Tax Time Saving?

$**2,883 

1. Internal Revenue Service (2012), Data Book, 2011 (Publication 55B). http://www.irs.gov/pub/irs-soi/11databk.pdf

2. Internal Revenue Service (2012), Data Book, 2011. 

3. Internal Revenue Service (2012), Earned Income Tax Credit table. http://www.eitc.irs.gov/central/eitcstats
Why Intuit? 

• Approximately 45 million returns filed using 

software

– 22 million of them filed by TurboTax customers

• Built on existing infrastructure

• Socially conscious 
Refund to Savings Initiative

Intervention 

in Intuit Tax 

Freedom 

Project

Household 

Financial 

Survey

Intention 

Survey

2012 Intervention in Intuit 

Tax Freedom Project 

•Randomized controlled trial

•Sample size: 148,619

•Tests behavioral 

interventions

1. Motivational prompts

2. Choice architecture

3. Anchoring

Emergency
Motivational Prompts

Goals

Retirement
Choice Architecture

http://www.qualitativemind.com/trend-tamer/behavioural-economics
Anchoring: The Default Matters
• Administrative data collected by Intuit

• Tax return information anonymous per IRS 

Section 7216

• Large sample size

• Nine groups: eight treatment and one control

RCT: Data Characteristics
RCT: Research Questions

1. Can motivating prompts increase saving?

2. Does default presentation affect saving 

performance?

3. Which combination of motivational prompts 

and default presentation of choice produces 

the largest impact on saving behavior?
RCT: Outcome Variables 

• Split refund 

• Amount saved 

• Any saving

• Proportion of refund saved 
In-Product Offer Sample Size 

148,619

Total sample 

40,939 

Took paper 

check 

107,680 

Took bank 

deposit
Sample Characteristics (N = 107,680)

• Very low-income 

o AGI mean: $13,000 

o AGI median: $11,166

• Modest refund amount 

o Mean: $1,019

o Median: $589

• Estimated: 10% have children 

• Late season filers: March 15–April 17
Preliminary Results: Full Sample

• Increase in rate of splitting (p < .001)

o 1% increase in splitting 

− Doubled the number of people who split

− But started with a very small portion of people who 

split 

• Increase in any saving (p < .001)

o 9.8% of treatment-group members saved 

compared to 7.7% of control group
Amount Saved

n = 107,680
Proportion of Refund Saved

n = 107,680
Splitters: Amount Saved

n = 1,357
Splitters: Proportion of Refund Saved

n = 1,357
Summary 

• Impacted savings behavior 

• Anchoring works

• Large magnitude of effect on small percentage 

of people
What Is Next? 

• How can we get more people to save? 

o Automatic splitting in 2013

o Testing over the full filing season

• Intervention in TurboTax 

o 2013: About 1.2 million households

• Household Financial Survey

o 2013: 12,000 households

• Examine new and innovative products
Acknowledgments 

Intuit Inc.

Ford Foundation

Annie E. Casey Foundation

University of North Carolina

Anonymous funder 
2013 Emergency Prompt
2013 Additional Motivational Prompts

Family

Future
:Feder-a.l Re1'und 

$1,300 

G e t Ans w e r s 

Find Tax Help 

Using T urboT ax 

Contact Us 

My R e t u rn 

View Tax Summary 

Print M y Return 

V iew Past Returns 

M y TurboT a.x Fees 

A mend a Return 

Other Options 

I 

C.--eate Use.-- I D Exit 

P Search Topics or Forms 

VVhy not save a I ittl e money? 

You can split you..- ~ederal ..-e~und into a savings account o..- get a U.S. Series 1 

Savings Bond_ 

VVe suggest saving at least 25o/o ( $350) 

Amount to save: 

~ Topic List 

$ 

G Help 

350 

C h oose a s a v ings m e thod: Recalculabt 

@ An e x isting savings a c c o unt 

IE> A u_s_ S el"ies 1 S aVing s B o nd 

Amount that stays in your Bank o-r- Arnenca checking accou nt ending in 1234: $950 

Ente.-- O i .--ect Deposi1: lnfonnat ion 

...--.-..u..n Doe 

1200.,._n et: 

~n.CA"12a.4.D' 

Your total federal refund: $1 . 300 

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Not e : ~o~ l!<:e s ure t o 'd hoose a U .S . b a.sed fi n a n cia l ins t ituti on for- y our- dir-ect dlepo,s it tr-a n sacti o n. L ear-n Mor-e 

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Lice nse Agreem e nt Priv a cy S ecurity Support 

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I 
Get A n s w e r s 

F ind T ax H e lp 

U s ing, TurboT .ax 

Conta ct Us 

My Return 

Vie w T ax S umma ry 

P rint My Return 

Vie w Past Returns 

My Tur boTa x F e es 

Ame n-d a Return 

Othe r Options 

Cr-eate Use.- 10 Exi1 

P Sea rch Topics or F orms. - Topic List G Help 

\IVhy no~ save a I ittle rnoney? 

You can split your- federal r-efund into a savings account or- get a u _s _ Ser-ies 1 

Savings Bond_ 

VVe suggest saving at least 25% ($350) 

Arnoun1: to save: 

Choose a savings method: 

oe> An existing savings account 

@ A u_s_ ser-ies 1 Savings Bond 

$ 350 

Recalculabt 

Arnoun1: that stays in your- Bank o"f America checking account ending in 1234: $950 

Your total federal refund: $1 . 300 

Your- u _s_ Savings Bonds will be .-na.iled to the address on your- feder-al tax retur-n_ 

Name on savings bond: C hris customer- & susy customerSavings bond amount: $ 350 

Benelllcia.-y name (optional): 

Go Bac k I don't need t o save 

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