Millions of low-income Americans work hard for wages but face obstacles in filing their taxes. In cases where people don’t owe taxes, they often don’t realize that they are entitled to tax refunds – refunds that can have a huge positive impact on a family that is struggling financially.
This is where the Volunteer Income Tax Assistance (VITA) program comes in. Built on public-private partnerships and led by the IRS, the VITA program trains and certifies volunteers to help low- and moderate-income families who cannot afford the fees for professional tax services but who still need assistance to accurately complete their taxes. Each year, tens of thousands of IRS-certified volunteers – working at sites in every state nationwide – assist individuals and families of limited means; those with disabilities; and those with limited English proficiency to accurately fulfill their tax obligations. These volunteers also ensure that households can claim and keep the full amount of any tax credits which they have earned and are eligible for, including tax credits like the Child Tax Credit (CTC) and the Earned Income Tax Credit (EITC) which have been expanded even further through the American Rescue Plan.
The VITA program provides a trusted service for individuals who are hesitant to interact with the government, such as individuals who have been incarcerated or recent immigrants. In addition, VITA sites connect clients to resources like bank accounts or health coverage programs, which may be particularly important for households of color who face barriers to accessing those resources.
That’s why United Way Worldwide and Prosperity Now are partnering to encourage Congress to fully fund the VITA program at $30 million in fiscal year (FY) 2022. And today, we invite you to join our partnership and sign on to our letter.
In 2020, more than 3,600 VITA sites prepared over 1.1 million tax returns which generated over $1.7 billion in refunds to low- and moderate-income households. Additionally, participating VITA sites maintained a 94% accuracy rate—one of the highest in the industry.
During the pandemic, VITA programs quickly worked to identify, plan for, and deploy alternative service delivery models of tax preparation to continue to serve their communities. The requirements for non-filers and those in traditionally underserved populations to file a tax return to access the Economic Impact Payments authorized by the Coronavirus Aid, Relief, and Economic Security (CARES) Act resulted in a surge in demand for VITA services in the summer and fall of 2020. Thousands of VITA programs quickly assessed the need to transform their program operations away from their traditional face-to-face services. Alternative service delivery options like drop-off services, facilitated self-access and virtual VITA, which had all been explored and piloted to some degree in previous filing seasons, rose to the forefront as solutions for low-income filers. By the end of October, VITA programs had served over 1 million clients.
VITA, EITC, CTC and the Economic Impact Payments will help the hardest hit families in communities throughout the United States recover and rebuild. Please join United Way Worldwide and Prosperity Now in our partnership to encourage Congress to fully fund VITA in FY2022.
This blog was co-authored by Joanna Ain, Associate Director of Policy at Prosperity Now.