Iowa State University Extension

Problem:
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 benefits’ value to their families.

Response:
ISU Extension in Hamilton, Wright and Tama Counties coordinates a tax outreach project in which local volunteers are recruited and trained to prepare simple tax returns for low-income workers; the volunteer commitment is extensive, involving typically a minimum of 16 hours of independent study, 6 hours of group training, and passing one or more tests. The project is conducted in cooperation with RSVP and other local agencies, with funding through Iowans for Social and Economic Development. 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.

Impact:
The 2008 tax season brought substantial growth to this tax outreach project. Eight IRS-Certified tax preparation volunteers were recruited and organized, five of them new. This substantially increases community capacity to provide support and assistance to low-income families. In addition, non-certified volunteers were involved for the first time to serve as hosts, helping to manage the flow of customers.

2008 Tax Data:
Number of current-year tax returns filed: 297 (compared with 112 a year ago)
Nine first-time filers
47 who paid someone to do their taxes last year
Total refunds received: $411,552 (compared with $161,000 a year ago); $128,580 of that total is EITC

The refunds received by low-income families not only provide funds to assist the families directly with meeting their needs and getting ahead, but also contribute to community economic development.

Contact:
Barb Wollan
Hamilton County Extension
311 Bank Street
Webster City, IA 50595
515-832-9597
bwollan@iastate.edu