From Protecting to Strengthening: It’s Been Quite the Year for VITA!
Low- and moderate-income families were dealt a tough hand this past year, especially around tax issues. The new tax legislation passed at the end of last year is extremely harmful to working families—the overwhelming majority of the bill’s benefits go to the top one percent. And last June, less than a year ago, Volunteer Income Tax Assistance program (VITA) funding was attacked. A budget proposal for fiscal year (FY) 2018 was released in the House of Representatives that would have cut federal VITA funding to $7.5 million, 50% lower than the FY17 budget of $15 million.
The VITA field quickly mobilized to protect VITA funding with phone calls, emails and visits to their Members of Congress, demonstrating the impact VITA has on communities across the nation. Just two weeks later, we were notified that funding would be restored to its full $15 million in the 2018 Appropriations bill. This was finalized by Congress this past March.
But what a difference a year makes. This week (appropriately on Tax Day!) we celebrated another VITA victory—one that would make VITA even stronger than before. The House passed the VITA Permanence Act, a bipartisan bill that would permanently authorize the VITA program and allow funding up to $30 million.
The VITA program has never been formally codified by Congress, despite its reputation as a great example of a public-private partnership with high results. The VITA Permanence Act would change that by making the program permanent. The passage of this bill on the House floor is a testament to our VITA field members and how they have educated and advocated throughout the halls of Congress with phone calls, emails and visits—even during their busiest time, the tax season. The bill now moves onto the Senate.
So why is VITA worth these battles? It connects families to the tax credits they depend on to save, pay down debts and invest in long-term assets. There are 4,300 VITA sites around the country that prepared over 1.4 million tax returns in 2017 with a 93% accuracy rate, one of the highest in the industry. These sites generated over $2.1 billion in refunds to assist households earning less than $54,000 in annual income.
As lead sponsor of the bill, Rep. Carlos Curbelo (R-FL-26) stated on the House floor on Tuesday, "The VITA program goes a long way to mitigate the threat preparer fraud poses to vulnerable communities by providing free tax preparation services administered by IRS-certified preparers." And lead sponsor Rep. Danny Davis (D-IL-7) remarked, "With the new tax law, these high-caliber, in-person services are needed even more. It is a prime example of smart, federal investment because each federal dollar is matched by the private sector."
VITA sites provide a foundation for low-income families to get help building their assets during tax time. Last week, Prosperity Now was proud to publish a piece in the Child Poverty Action Group's Our Kids, Our Future: Solutions to Child Poverty in the U.S., a cross-sector guide to reducing child poverty in the United States. Our paper, "Helping Working Families Build Wealth at Tax Time," discussed the importance of refundable tax credits and how VITA sites connect low-income households to critical tax credits like the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC). It also highlighted policies that could help working families build wealth when they do their taxes, like expanding EITC eligibility, making the CTC available to lower-income families and empowering filers to save by establishing a rainy-day EITC.
While each of these policy recommendations would help families save during tax time, VITA programs themselves form a backbone of support that connects low-income households to free tax preparation services. With the VITA Permanence Act, this program would be codified and the sites would have more certainty that the program will continue.
Next up, the VITA Permanence Act moves to the Senate. As lead sponsors of the Senate’s bipartisan VITA Permanence Act, Sen. Sherrod Brown (D-OH) and Sen. Dean Heller (R-NV) have been strong VITA supporters, championing the work of VITA sites. But as this legislation moves to the Senate, we still need your voices. Here’s what you can do:
- Call your Senators and ask them to support the VITA Permanence Act (H.R. 2901).
- Continue to educate them on the importance of VITA and share VITA data from your state.
- Now that tax season is over, invite them to your site and tell them stories from this past tax season so they can hear directly why VITA is so critical in your community.
We’re getting closer and closer to making VITA stronger for the 2019 filing season. Thank you to the incredible VITA field for their ongoing advocacy as we work to protect and strengthen VITA. Together, let’s now turn to the Senate and make VITA permanent.