Co-Authored by:
Joanna Ain; Associate Director of Policy at Prosperity Now
Bessie Bauman: Policy Intern at Prosperity Now
About 12 million eligible people have not received Economic Impact Payments, leaving unclaimed roughly $12 billion of the funds Congress authorized to mitigate hardships caused by the COVID-19 pandemic, according to new data from the Center on Budget and Policy Priorities. They are primarily from households with low incomes and people who do not normally file taxes. They are also often in households of color, already facing the brunt of economic hardship from COVID-19.
These striking statistics demonstrate the enormous need for community-based organizations, like the Volunteer Income Tax Assistance (VITA) program, to help families obtain the money available to them. Through 3,700 sites, VITA reaches low- and moderate-income households to help them file their taxes and now, receive Economic Impact Payments. VITA’s services are essential to making sure that these families can easily and properly access the money they are entitled to in order to weather the uncertainty brought on by the pandemic.
Most VITA sites closed their physical doors in March, and some will remain closed for the foreseeable future. However, many are continuing to serve taxpayers through alternate means, such as virtual preparation or drop off, until the extended tax filing deadline of July 15. Some will even offer services through October. Sites are receiving an influx of clients who need help, not only with filing their tax returns, but also with submitting key information to the IRS so they can receive their Economic Impact Payments.
In these challenging times, a tax refund or an Economic Impact Payment can help a family survive. VITA is critical in helping households access these funds. There’s no cost to clients, saving each household an average of $273 in tax preparation fees. Families can use this money to purchase groceries, pay bills and build emergency savings. There is even evidence that putting more money in the pockets of families in need, given through the Earned Income Tax Credit (EITC), can be an effective public health intervention.
Despite the important work VITA does to support low- and moderate-income taxpayers -- and now non-filers -- Congress has not allocated emergency funding specified for VITA. As VITA sites continue preparing taxes and assisting non-filers through the extended filing season, they need funding support to increase capacity and extend their services to more low-income households, especially to households with limited technology access.
VITA is a permanent program, thanks to the advocacy of Prosperity Now’s Taxpayer Opportunity Network (TON) and United Way Worldwide, but these are unprecedented times. We must work to provide VITA sites across the nation with $12 million in emergency funding, making VITA’s total funding for this tax season $30 million. With your help and advocacy, VITA sites will not need to match these emergency funds, so they can continue to focus solely on serving more clients in need.
Act now to contact your members of Congress and request that they provide VITA with the emergency funding it needs. In this uncertainty, VITA should be a steady source of help for families. We must continue to advocate for increased VITA funding, during this pandemic and into the future.