Most taxpayers spend their tax refunds in their communities; they may pay off loans, make necessary repairs on their vehicles or homes, make big-ticket purchases like new appliances or vehicles, or place a portion of their refunds into emergency savings accounts.
The impact of every refund dollar spent in communities is greater than its face value, as it positively affects not only the family that received it, but also each business where it is spent or the financial institution where it is saved. Because of this multiplier effect, every dollar of tax refunds received and spent by families who used the free tax-preparation sites creates an additional 21 to 63 cents of economic activity in Kentucky communities.
For example, if a family uses its tax refund to repair a car, it pays a mechanic for the work. That mechanic, in turn, received income and will likely spend a portion of it on parts and purchases for his own household. The store that sold the car parts receives payment from the mechanic, and so on.
Economic Impact By The Numbers
|Tax Season||Tax Returns Filed||Earned Income Tax Credit||Total of All Refunds|