RD314 - Report on the Virginia Community Action Partnership Earned Income Tax Credit Initiative Virginia CASH Campaign - December 1, 2012

Executive Summary:

The Virginia Community Action Partnership believes the free tax preparation activity during the 2012 filing season (January 15 through April 15 for the 2011 tax year) is due to the success of the EITC grant program. This year, 27 coalitions working with free tax preparation programs throughout the Commonwealth received funding from the grant. The Virginia CASH Campaign highlights include:

• Over $31.8 million in federal refunds
* Over 24,000 federal returns filed

• Almost $11.5 million in EITC refunds
* Over 7,500 taxpayers claiming EITC
* $4.8 million saved in tax preparation fees

• Over $4.1 million in state refunds
* Over 22,500 state returns filed

Compared to 2010, this represents:
• 13.6% increase in the amount of federal refunds
• 7% increase in the number of EITC returns prepared

The modest state-funded $185,725 EITC Grant program (average grant $6,800) resulted in 1,200 volunteers working with 27 coalitions to provide free tax preparation and financial education services at over 137 sites throughout Virginia. The Virginia Office on Volunteerism and Community Service estimates the value of volunteer time to be $24.29 per hour. The Virginia CASH Campaign volunteers contributed over 50,000 hours to the program. This equates to an over $1 million value to the program and communities where these volunteers live and work. Grant funds leverage over five times the amount in volunteer time.

The Virginia Community Action Partnership (VACAP) EITC Initiative supports community groups and coalitions throughout Virginia that provide free tax preparation services and promote financial literacy, savings and asset building to low income working individuals and families. The Virginia CASH Campaign (Creating Assets, Savings and Hope) gives the program an identity that can be used by the coalitions to engage community partners in their work. State and federal partners in the Virginia CASH Campaign include the Virginia Department of Social Services (VDSS), Department of Housing and Community Development (DHCD), and the Internal Revenue Service (IRS). Collectively the mission is to raise awareness of the EITC, especially among eligible recipients, and to provide free tax preparation services by certified volunteers. We encourage financial literacy and education, savings and asset building programs to enable clients to work toward self-sufficiency.

In October 2011, VACAP hosted The Fall Classic, a day long workshop that brought 65 free tax program practitioners to Richmond. Coalition representatives from across the region learned about innovative program models for free tax preparation services and how to help residents achieve success in building assets.

Thanks to a generous grant from Intuit Financial Freedom Foundation the program was offered free of cost to all attendees. The focus of the meeting was assisting disabled clients in need of tax and financial education services. The National Disability Institute’s Real Economic Impact Tour work in Virginia communities was highlighted. Participants also learned about the Centers for Independent Living and the Hampton, VA Mayor’s Office on Disability.

The EITC grant was announced at the Fall Classic and completed proposals were due at the VACAP offices on November 8, 2011. Twenty-seven grant recipients were notified of successful proposals on November 23, 2011 and funds were disbursed on November 30, 2011. Each coalition submitted a budget and plan as to how the grant funds were to be used throughout the year. The largest funding allocation is for personnel and training costs: site and volunteer coordinators, AmeriCorps positions or already established positions within an organization taking on additional tax season responsibilities (56%).

Advertising, website and printing costs for marketing, education and outreach materials totaled 13% of the total budget. Financial education and travel expenses for the 27 coalitions totaled about 5%. Equipment, rent and supplies totaled about 11%. Other funds were for volunteer recognition and administrative costs.

VACAP maintains a website dedicated to the CASH Campaign. http://www.vaeitc.org provides timely information to EITC partners, clients and funders throughout the year, but especially during tax filing season. Coalition information, data, flyers, asset building links, news articles, PSAs and funding resource information is readily available. This key component links all coalitions and assists in communication and sharing best practices. Between January and April 2012, the site averaged over 10,000 page views with an average of 5,100 visits per month. VACAP is also an affiliate of the National Community Tax Coalition which provides valuable training and technical assistance to coalition members.

In February 2012, VACAP represented the Virginia CASH Campaign during a public briefing at the Library of Virginia where Governor McDonnell and Speaker Howell talked about the new Virginia Free File program. As a result of Virginia becoming a Free File state, more than 2 million eligible Virginia taxpayers now have the opportunity to prepare and file their federal and state returns online for free.

Intuit Financial Freedom Foundation expanded Assisted Self Tax Preparation (ASTP) to 10 coalitions that provided clients an opportunity to prepare their own taxes. ASTP allows one volunteer to work with more than one taxpayer at a time and empowers the taxpayers to prepare their own returns with help from a certified volunteer. The IRS, Intuit and many other Free File vendors have embraced this model of assisted self-tax preparation. The program will continue to expand in 2012-2013 under the name Facilitated Self-Assistance (FSA).