Anti-Poverty Advocates Earn Victory for Low-Income Families Through Permanent Free Tax Services
Washington, D.C. – National nonprofits United Way and Prosperity Now are celebrating the permanent authorization of the Volunteer Income Tax Assistance (VITA) program which provides low-income families with free tax preparation. Congress passed the bipartisan Taxpayer First Act, that included language to codify the VITA Community Matching Grants Program, on Thursday.
VITA began 50 years ago and evolved in 2008 with a demonstration grant which supplied limited federal funding. Once the President signs the Taxpayer First Act, VITA will be permanently codified, and millions of taxpayers can count on this critical program for many tax seasons to come. The VITA program engages volunteers who become IRS-certified tax preparers to provide qualifying individuals and families with free, quality assistance in filing federal tax returns. The program is available to taxpayers that generally earn $54,000 or less, and who come from traditionally hard-to-reach and underserved communities. These communities include people with disabilities, the elderly, and ethnically diverse groups.
VITA sites in every state across the country—more than 3,700 in total—prepared over 1.5 million tax returns in 2019. These sites have a 98% accuracy rate—the highest in the tax preparation industry—and generated over $1.8 billion in refunds to assist households earning an average of $26,000 in annual income. The boost in income brought back to these communities through their federal tax refund dollars helps families navigate financial crises, pay down debt, manage household expenses and start saving for the future.
Representative Danny Davis (D-IL-7) shared this statement:
I am proud to have worked with United Way, Prosperity Now, and other advocates to permanently authorize and increase funding for the Volunteer Income Tax Assistance program – or VITA – a crucial program that provides high-quality tax help to hard-working families so they can keep more of their hard-earned money. VITA sites help put more money in my constituents’ pockets to cover essential costs – like rent, groceries, utility bills, and medical care.
Prosperity Now President Andrea Levere had this to say about the development:
We are deeply appreciative of the leadership of Senator Sherrod Brown (D-OH), Representatives Danny Davis (D-IL-7) and Brad Wenstrup (R-OH-2) for being champions for VITA and the hardworking families the program supports. For 50 years, VITA has helped millions of low- and moderate-income households make the most of the tax time moment. What started as a small program in 1969 to help the IRS increase taxpayer education has evolved into a critical resource for low- and moderate-income tax filers. Today, the VITA program helps ensure accurate tax returns for these filers and equitable access to the tax code and its many benefits. It also helps working families overcome many challenges at tax time, such as those due to the recent partial government shutdown, resource constraints at the IRS and filing under the new tax law, the Tax Cuts and Jobs Act of 2017.
United Way Worldwide Senior Vice President and Counsel for Public Policy Steve Taylor noted:
The passage of this bill means that millions of taxpayers can continue to count on access to free, quality tax preparation assistance. Everyone knows doing your taxes isn’t easy. But for years VITA has been there to help people who are already struggling with a lot, to be able to navigate the tax code with confidence and to and claim tax credits they’ve earned, like the Earned Income Tax Credit and Child Tax Credit. These credits are the most effective anti-poverty tools we have as a nation, and VITA has been a key part of getting folks access to those tools—so they can pay for things like reliable transportation to work, childcare, or even groceries. This is a major win for hardworking Americans across the country who deserve a fair shot at a better life.
The Fiscal Year 2019 appropriation of $18 million represents a fraction of the cost of operating VITA sites nationwide. While the tax returns are prepared by volunteers, sponsoring community organizations contribute significant resources to recruit and train the volunteers to IRS standards; supervise the volunteers to ensure accuracy; provide office space and computers for electronic filing; and conduct outreach to community members.
United Way and Prosperity Now thank Congress for their support in permanently authorizing the program while calling on elected officials to fund the program at $30 million in FY20.
About United Way Worldwide
United Way is engaged in nearly 1,800 communities across more than 40 countries and territories worldwide. We are focused on creating community-based and community-led solutions that strengthen the cornerstones for a good quality of life: education, financial stability and health. We envision a world where every community is a strong one, with jobs that pay a livable wage, good schools and a healthy environment. Around the world, we engage people and organizations in innovative solutions that are transforming that vision into reality.
About Prosperity Now
Prosperity Now believes that everyone deserves a chance to prosper. Since 1979, we have helped make it possible for millions of people, especially people of color and those of limited incomes, to achieve financial security, stability and, ultimately, prosperity. We offer a unique combination of scalable practical solutions, in-depth research and proven policy solutions, all aimed at building wealth for those who need it most.