Since this past Tuesday, March 15, was VITA Awareness Day, it seems appropriate to share a few thoughts about the Volunteer Income Tax Assistance (VITA) program and the role that credit unions can play in making free tax assistance available in their communities. In Montana, that has certainly been the case.
For over a decade, Volunteer Income Tax Assistance (VITA) sites have been trusted spaces where working families can go to get help in filling out their income taxes. The VITA program provides low-and moderate-income families access to free and easy tax-preparation services, and nationally, has put billions of dollars back into the pockets of hard working Americans.
In 2015, IRS-certified volunteers serving in Montana’s over 60 VITA sites and numerous Tax Counseling for the Elderly (TCE) sites helped return over $16 million dollars in federal income taxes to more than 16,000 working Montanans. That’s a lot in our geographically huge, largely rural state. Because these services do not cost eligible filers a dime and have far lower error rates than self-and paid-tax preparers, tax filers are able to claim more of what they earn, which helps them better make ends meet, build financial stability, and save for the future.
VITA volunteers also help raise awareness about the federal earned income tax credit (EITC) and make sure that working taxpayers claim the credit at the correct amount. Research shows that the EITC lifts millions of working families out of poverty every year, encourages single parents to work more, and improves children’s school performance and earnings later in life. But, 20 percent of eligible tax filers do not claim the credit.
Last year, VITA/TCE volunteers in Montana helped provide over $5 million to 4,000 low-income working families through the EITC. These families were able to use their refunds to get caught up on bills, pay for basic necessities, like food and utilities, and cover expenses like car repairs, which helps secure a reliable form of transportation to get to and from work.
Why Credit Unions
Every year, the VITA program helps low-and moderate-income working families make the most of their refunds, which improves their financial security and supports local economies. Being a part of VITA offers credit unions a great way to fulfill their mission to help members and participate in their communities – it’s a chance to build trust with current members and the perfect opportunity to reach out to non-members, who maybe haven’t heard of credit unions before.
In Montana, credit unions’ participation in VITA has really had an impact on the program’s reach and scope in our state. As this infographic shows, credit unions and our partners supported over half of the VITA sites and were responsible for a large portion of the tax returns filed and the refunds claimed in 2015.
Giving community members a free, safe, and smart alternative to more costly (and sometimes predatory) tax preparation services can take a lot of stress out of tax season for a lot of people. VITA is rewarding and it can also be a perfect fit for credit unions wanting to make a difference in their communities.