Gen Z Driving Shift Toward Digital Tax Payments, According to New Report From ACI Worldwide
Report finds that filing taxes electronically through popular software continues to decrease in popularity
This year’s ACI-commissioned YouGov report found that Gen Z is less likely than all other demographics to pay taxes via electronic fund withdrawals from checking or savings accounts (17%). Unlike Baby Boomers, Gen Xers and even Millennials, Gen Z respondents preferred alternative payment methods (10%) and credit cards (17%).
Additionally, Gen Z taxpayers are several times more likely to engage sources outside of professional tax preparers. When asked where they would go to find information about how to pay any taxes they may owe, Gen Z respondents were more than twice as likely as Millennials to use Google (17%) and more than four times as likely as Millennials to ask family/friends (17%). In comparison, only 1% of Gen X and 3% of Baby Boomer respondents, respectively, said they would use Google. Gen Z is also the least likely to use tax preparation services (e.g., TurboTax, H&R Block, etc.), independent professional tax preparers or the
“This year's findings highlight a pivotal shift towards digital and alternative payment methods, especially among Gen Z. As they diverge from traditional tax payment avenues, it’s imperative to adapt and innovate.
This year’s study also found that, across all generations, preferences have shifted over time toward digital payments. In 2020, 50% of those surveyed preferred digital payment methods, and 32% preferred analog methods; now, those numbers are 61% and 22%, respectively.
“It is clear that there is a holistic shift in payment preferences, demonstrating a decisive move toward digital methods across all age groups. Our latest report underscores the need for financial institutions to adapt to the cultural and digital transformation already taking place,” Shultz added.
For more than 20 years, ACI has supported the billing and payment needs of federal, state and local government entities with secure, Payment Card Industry-compliant solutions. ACI is one of three service providers for the
Additional Survey Insights
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Top three ways respondents plan to file their taxes this year:
- 39% will file electronically through popular software (e.g., TurboTax, H&R Block, TaxSlayer)
- 30% will file electronically or by mail through a professional (e.g., CPA, tax accountant)
- 10% will file by mail/paper
- This marks the third consecutive survey in which the percentage of respondents who plan to file electronically through popular software has decreased, from 45% in 2022 to 42% in 2023 to 39% in 2024.
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Top five ways respondents would spend their tax refund, if they received one:
- 46% would deposit into a savings account
- 38% would pay down debt (e.g., credit cards, loans, etc.) – a 4% year-over-year increase, perhaps indicating a strain on the consumer amid an inflationary macroeconomic environment
- 21% would make minor purchases (e.g., clothing, sporting goods, etc.)
- 17% would make home improvements
- 14% would invest in stocks, bonds, cryptocurrency, etc. – a 3% year-over-year increase
Survey Methodology
All figures, unless stated otherwise, are from YouGov Plc. The total sample size was 1,185 adults. Field work was undertaken
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