Tax Outreach Project Helps Families Get Ahead
Need:
The Earned Income Tax Credit (EITC) and the Child Tax Credit are extremely
important policy tools for improving low-wage-earners’ quality
of life, lifting them out of poverty, and enabling them to get ahead
financially. Unfortunately, some eligible families miss these benefits
because they do not file a tax return. Many others pay very high tax
preparation fees, including expensive refund anticipation loans, reducing
the benefit’s value to their families.
Response:
ISU Extension in Hamilton, Humboldt and Wright Counties coordinated
a tax outreach project in which simple tax returns for low-income workers
are prepared free by tax volunteers; the project is conducted in cooperation
with local Empowerment, other agencies, RSVP and volunteers, Institute
for Social and Economic Development and the Annie E Casey Foundation.
Outreach education is provided to staff members of local agencies, so
that they can effectively inform their clients of the relevant tax issues
and the opportunity to have their tax returns prepared and filed electronically
with no fee. Special outreach is conducted to reach new immigrants,
as well, since they have special tax issues and are less-informed about
the issues. In addition, educational displays and handouts are present
at the tax preparation sites to encourage wise use of this important
income. A “Getting Ahead Challenge,” in which a small incentive
was offered to participants who set and achieved a savings goal by July
1, was also offered to interested participants.
Impact:
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86 tax returns were prepared by Extension volunteers, leading to refunds of $143,608, of which $40,784 was Earned Income Credit and $51,525 was Child Tax Credit.
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41% of the taxpayers reached were Asian, Hispanic or Other races; 58% were Caucasian.
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32% of the taxpayers had paid for a refund anticipation loan when filing taxes the previous year.
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Fifteen individuals or households signed up for the “Getting Ahead Challenge.” At least six of those households did accomplish a savings goal (four did not, and we have received no response from five).
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Goals accomplished by these participants included:
Three opened savings accounts
Two increased the balance in their savings accounts by $300 or more
One began contributing to a retirement account at work
[In addition, a seventh participant purchased a house for the first time. The purchase of the house prevented them from achieving their savings goal, but can be seen as an additional success in itself!]
Contact:
Barb Wollan
ISU Extension Family Resource Management Specialist
311 Bank Street, Webster City, IA 50595
Phone 515-832-9597; Fax 515-832-9599
Email bwollan@iastate.edu
..........more stories....................!
Last update: August 17, 2006
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