Analysis: The Case for Making Volunteer Tax Assistance Permanent
Updated March 5, 2019 to reflect recent changes surrounding VITA.
Growing Momentum for VITA
Last month, the House of Representatives passed an appropriations bill that will continue funding the Volunteer Income Tax Assistance program (VITA) at $18 million in 2019, a three million dollar increase over the past years. A draft Senate bill currently includes $18 million in funding as well. It’s thanks in part to hundreds of our Tax Opportunity Network (TON) partners who demanded their members of Congress keep VITA’s federal funding off the chopping block last year.
Maintaining (or, even better, increasing!) support for VITA is crucially important for working families who benefit from the program. More than 1.3 million low- and moderate-income families rely on VITA to file their taxes. In a new policy brief, Leveraging Tax Time for Working Families with VITA, Prosperity Now outlines the important role VITA plays—and how Congress could strengthen it.
The House has already passed legislation making VITA a permanent program in federal law and included similar language in a broader bill to reform the IRS. Advocates can use our brief to show the importance of VITA in their communities and urge Senators to follow the House’s lead. The brief also offers recommendations to strengthen VITA and help working families.
VITA Helps Working Families Get the Most Out of Tax Time
For many working families, tax season is a crucial moment in the financial calendar. Tax refunds can account for as much as one-fifth of annual income for some households. And they’re even more important for working families that depend on the Earned Income Tax Credit (EITC), the largest and most effective antipoverty program in the United States today.
This year alone, VITA saved taxpayers approximately $350 million in fees to paid tax preparers, who are largely unregulated and target low-income communities. VITA volunteers helped tax filers access $1.8 billion in tax refunds, including $646 million from the EITC.
While the federal government invests $15 million in the program, VITA is also funded through local communities. For every $1 the federal government spends, VITA providers are required to secure at least $1 of support from local, state or private funds. Because of this additional matched funding, an increase in federal funding goes a long way to support VITA.
Congress Should Make VITA Stronger to Meet Demand
By permanently authorizing VITA in law and doubling federal funding, Congress could help even more working families. Making VITA stronger isn’t just smart policy, it’s also a rare issue on which Republicans and Democrats agree.
Right now, VITA doesn't exist permanently in U.S. law, even though it's been around for half a century. Authorizing VITA permanently in statute would allow VITA providers and people who rely on the program to have more certainty that it will continue. The House already passed the VITA Permanence Act (H.R. 2901). You can help by contacting your Senators and urging them to follow suit.
Congress should also increase VITA’s federal funding to $30 million. Doing so would allow more VITA sites to serve more families. Increased funding could help VITA meet the rising demand for free tax preparation by opening new sites and improving volunteer recruitment. More funding could also increase public outreach so that more low- and moderate-income households know about VITA.
VITA is a great example of how a small federal investment and close partnership with communities across the country can have a meaningful impact on working people’s lives. You can learn more about the program’s impact in our new policy brief, Leveraging Tax Time for Working Families with VITA. Reach out to your Senators to encourage them to follow the House’s example and make VITA permanent, and be sure to join the Capitol Hill visit at the Prosperity Summit to tell members of Congress how important it is to strengthen VITA.