RD575 - Report on the Virginia Community Action Partnership Earned Income Tax Credit Initiative Virginia CASH Campaign – December 1, 2020

Executive Summary:

The coalitions of the Virginia CASH Campaign were on track to increase the number of clients served with free tax preparation across the Commonwealth of Virginia this tax season until March 16, 2020 when the COVID-19 pandemic forced the closing of over 120 VITA sites. Some sites were able to re-open using models of no-contact virtual methods to continue to assist clients until filing season officially ended on July 15, 2020. Staff and volunteers at several coalition partner agencies transitioned into other service areas related to the pandemic. This tax filing season was unprecedented and many of the coalitions successfully and abruptly pivoted to re-create their VITA program to maintain safety standards. Twenty one coalitions working with community volunteers received funding from the Earned Income Tax Credit grant. VACAP supports this program with its own funds and receives none of the appropriation for administering the grant program.

The Virginia CASH Campaign highlights include:

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

• $8.7 million in EITC refunds
o Almost 5,300 taxpayers claiming EITC
o Over $5 million saved in tax preparation fees

• $5.6 million in state refunds
o Over 19,400 state returns filed

• 1,100 Volunteers
o Over 32,000 hours of tax preparation time

The modest state-funded $185,725 EITC Grant program (average grant $8,400) resulted in over 1,100 volunteers working with 22 coalitions (one coalition did not apply for funding) to provide free tax preparation and financial education services at over 120 sites throughout Virginia. More coalitions are offering Facilitated Self-Assistance which allows clients to file their own taxes where help is available if needed. The Independent Sector estimates the 2019 value of volunteer time nationally at $27.20 per hour. In Virginia, the value is $28.46/hour. The Virginia CASH Campaign volunteers contributed over 32,000 hours of tax preparation to the program. Additional hours were contributed for tax training and financial education. This equates to almost $1 million in value to the program and communities where these volunteers live and work.

The Virginia Community Action Partnership (VACAP) EITC Initiative supports community groups and coalitions throughout Virginia that provide free tax preparation services and promote financial stability, savings and asset building to modest income working individuals and families. The Virginia CASH Campaign (Creating Assets, Savings and Hope) gives the program an identity that is used by the coalitions to engage community partners in their work.

VACAP co-hosted the seventh Common Cents Conference in Fairfax, Virginia on September 17-19, 2019. Presentations and workshop sessions included strategies on savings, financial coaching, volunteer recruitment, management and retention, 2020 Census, and more. Joy Thomas Moore opened the conference with a well-received talk on “The Power of Presence". Delegate Mark Keam offered remarks and thanks on the important work being done to help people file their taxes. Over 150 participants from Maryland, Washington, D.C. and Virginia attended.

The EITC grant was announced at the conference and proposals were due at the VACAP office on October 24, 2019. Twenty-one grant recipients were notified of successful proposals on November 22, 2019 and funds were disbursed by December 2, 2019. 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 costs relating to VITA site management (59%) and equipment and supplies (12%).

Everything about this filing season changed in mid-March 2020. COVID-19 complicated filing season because of new regulations; social distancing, PPE, no contact, agency closures, limited volunteer availability and other challenges. Customers needed to be kept informed of their filing options. In addition, an Economic Impact Payment (EIP) was authorized by the CARES Act to provide a stimulus payment to eligible individuals. Sites that closed for face to face VITA began answering EIP questions to ensure that customers were able to receive the much needed stimulus payment. While each community is unique in its approach to outreach and marketing, this season created challenges and opportunities to engage customers. VITA outreach changed to EIP outreach using social media and word of mouth.

As a result of the pandemic, VACAP began hosting bi-weekly VITA Chats (Zoom) in early April 2020 to keep coalition partners engaged and current on any changes to VITA, COVID rules and regulations and other ongoing concerns related to providing service in uncertain times. The VITA Chats have been beneficial to keep partners engaged with one another and are ongoing.

Linking the tax time moment with other opportunities for financial engagement that is a normal part of the VITA experience took a back seat this filing season. Many coalitions plan to resume empowering their clients into taking control of their financial lives once they get back to a normal filing season. Keeping taxpayers compliant is one of Virginia CASH’s most important functions. If a taxpayer gets into trouble with the IRS or state department of revenue, all other efforts to help improve their financial situation are destined to fail.