SW Iowa Volunteer Income Tax Assistance (VITA) Program

Situation:
A way to improve the long term financial stability and well being of lower income working families is to increase income by ensuring they claim the Earned Income Tax Credit (EITC). In 2004, in 9 SW Iowa counties, IRS data estimates over 3,700 taxpayers will not claim the EITC resulting in $3-4 million going unclaimed.

Response:
With financial assistance from the Annie E. Casey Foundation, the SW Iowa Making Connections program in cooperation with ISU Extension recruited and trained 10 individuals to be IRS Volunteer Income Tax Assistance (VITA) workers. These volunteers provided free tax services at 20 sites throughout rural SW Iowa during January-April 2005. Returns were prepared using TaxWise software and e-filed. The tax services were marketed through local media, churches, financial institutions, and programs serving lower income families including HeadStart, WIC, etc. Appointments were scheduled through a toll-free phone number and confirmation letters were sent to participants. A packet of financial information was provided to participants including uses for tax refunds, budgeting, banking services, food stamps, HAWK-I insurance, the SHARE program, and refund anticipation loans. A follow-up workshop, Smart Spending and Saving was also held in Clarinda with 9 participants.

Impact:
Over 200 taxpayers called to request tax appointments with 131 returns prepared (Cass-21, Montgomery-19, Pottawattamie-29, Harrison-16, Mills-9, Shelby-10, Page-23, Fremont-4, Taylor-0). The total EITC claimed was $104,708 from 74 taxpayers resulting in an average EITC of $1,415. The Child Tax Credit was also claimed by 33 of the taxpayers totaling $43,686. These credits were reflected in a total federal refund amount of $198,076 received by 115 of the taxpayers. State refunds totaling $18,568 were also received by 97 taxpayers. Eighty-six of the participants chose to have the refund direct deposited into a bank account. A questionnaire with 96 responses indicated the top uses for their tax refund would be living expenses (utilities, food, rent, etc.), paying off debt, and savings.

Contact:
Mary Beth Kaufman
ISU Extension Field Specialist
Family Resource Management
906 6 th Street
Harlan , Iowa 51537
712-755-3104
E-mail mbkaufma@iastate.edu

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