Characteristics of Users of Refund Anticipation Loans and Refund Anticipation Checks

Using IRS data from 2008 and prior years, this report describes characteristics of Refund Anticipation Loans (RAL) and Refund Anticipation Check (RAC) users by demographic factors, Earned Income Tax Credit (EITC) use, income and assets, and geography.  The report also includes insights from industry stakeholders on use of RALs and RACs.  Many factors–EITC receipt, filing as a head-of-household, having no interest income, and living in a low-income neighborhood–relate strongly to RAL/RAC use, controlling for other characteristics, such as income. Industry stakeholders report consumers demand RALs/RACs partially to pay for return preparation.