Helping People with Low Incomes Navigate Benefit Cliffs: Lessons Learned Deploying a Marginal Tax Rate Calculator

This project developed a calculator to help people anticipate how a change in earnings from employment would affect their net income, and in so doing, provide public benefit recipients with their estimated effective marginal tax rate on new earnings.

Key Points:

• The calculator was designed to support program participants and caseworkers. Policy makers and program administrators may also find the calculator useful.
• Calculators were fully developed for New Hampshire, Maine, Allegheny County in Pennsylvania, and Washington, D.C., and completely customized for their local programs and rules.
• The resulting calculators captured most major federal and local means-tested benefit programs. See demo calculators here: http://frs.nccp.org/tools/mtrc/
• Local governments and local organizations can download the open-source code (https://github.com/HHS/effective-marginal-tax-rate-calculator) to start creating a customized calculator for their families.
• Lessons learned from developing the calculator include: being mindful of the trade-off between the calculator’s flexibility and user-friendliness; setting aside adequate time and resources to develop useful “next steps” for users who have their results in hand; and being mindful that web hosting the tool requires a high level of IT capacity from state and local governments.

Related Products:

• Marginal Tax Rate Series