VITA Sites as an Inroad to Financial Empowerment Engaging Families For Success Omni Hotel, Charlottesville, VA October

1. VITA Sites as an Inroad to Financial Empowerment Engaging Families For Success Omni Hotel, Charlottesville, VA October 28, 2013

2. Who We Are • Not-for-profit financial cooperative: Owned and controlled by our over 61,000 members, not profit-driven shareholders • We’re local: we put our money back into the communities we serve • We keep costs low and provide financial education and counseling services to people in need • Strive to improve the financial well-being of community members

3. What is the EITC? E arned I ncome T ax C redit • Refundable tax credit • Can reduce the federal tax to zero and any left over credit is refunded • To qualify, eligible workers must have taxable income from working for someone or from running a business or farm • Eligible individuals/couples must file a 1040 to get the credit even if their income is below the filing requirement

4. How Much is the EITC? For 2013 Tax Year: Earned Income and adjusted gross income (AGI) must each be less than: • $46,227 ($51,567 married filing jointly) with three or more qualifying children • $43,038 ($48.378 married filing jointly) with two qualifying children • $37,870 ($43,210 married filing jointly) with one qualifying child • $14,340 ($19,680 married filing jointly) with no qualifying children Maximum credit: • $6,044 with three or more qualifying children • $5,372 with two qualifying children • $3,250 with one qualifying child • $487 with no qualifying children Investment incomemust be $3,300 or less for the year.

5. Why It Matters • The EITC is one of the federal government’s largest and most effective anti-poverty programs • Helps reduce the federal tax burden on low to moderate income workers • Lifts families out of poverty • Supplements wages • Builds long-term assets

6. Why It Matters • Tax refunds are generally spent by the recipients in their community – creating an economic stimulus for area • According to the IRS, 20 to 25% of eligible workers do not claim federal EITC benefits

7. Evolving Tax Prep Predatory Practices • Refund Anticipation Loans (RALs) from fringe non-bank lenders • Shady tax preparers offering bait and switch schemes and high fees • Refund Anticipation Checks (RACs) taking place of RALs • Return Preparer Fraud

8. Prey Targets Based on 2010 IRS Data: • 92% of taxpayers who applied for RALs were low income (under $20K) • Taxpayers living in extremely low income communities are 560% more likely to use RALs and 215% more likely to use RACs • Nearly 66% of RAL consumers were EITC recipients yet EITC recipients made up only 20% of all taxpayers Source: Chi Chi Wu, National Consumer Law Center and Jean Fox, Consumer Federation of America

9. Solution: Organize (Volunteer Income Tax Assistance Sites) Provide safe and affordable tax preparation services Get the word out! Leverage the moment to help build long-term assets

10. What is the VITA Program? V olunteer I ncome T ax A ssistance • Free Federal and State Tax Preparation for most making $52,000 or less in 2013 (EITC Threshold) • Run by community organizations • Online training, certification, tax software, and oversight provided by IRS

11. Thomas Jefferson Area EITC Coalition Partners Local Government Departments of Social Services (Albemarle, Charlottesville, Greene, Fluvanna, Louisa and Nelson) Business Community & Employers Charlottesville Regional Chamber of Commerce JAUNT (Regional transportation) University of Virginia & UVa Health Systems UVA Community Credit Union Other Concerned For-Profit Entities Non-Profits & Community Agencies AARP TaxAide International Rescue Committee JABA – Jefferson Area Board of Aging Legal Aid Justice Center MACAA (Community Agency) Madison House (UVa Community Service) Piedmont Housing Alliance United Way—Thomas Jefferson Area UVa Law VITA Program

12. Thomas Jefferson Area EITC Coalition VITA Sites in 2013 12 Sites: Friendship Court Community Center International Rescue Committee Monticello Area Community Action Agency United Way TJA UVA Community Credit Union UVa Human Resources UVa Medical Center 1 6 1 1 1 1 1

13. TY2012 Results Combined TJA EITC Coalition Results in 2013 Total Returns Prepared: 2,114 Total Prep Value: $0.42 Million Total Federal Refunds: $3.20 Million (including $1.16 Million in EITC) Total Virginia Refunds: $0.41 Million Total Economic Impact: $4.03 Million

14. They Earned It.Now What? Help them make the best choices in building a more secure financial future: • Provide Financial Education • Establish savings accounts for unbanked • Option to buy U.S. Savings Bond with refund • Discuss benefits of a Share Secured Loan or Share Secured Credit Card to establish/rebuild credit and/or to act as alternative to Pay Day Lending • Provide information on Credit Union’s Pay Day Loan & Savings Plan (low-cost alternative to traditional Pay Day Loan)

15. How can you assist? • Support the Thomas Jefferson EITC Coalition • Become a Volunteer! • Spread the word: • Educate low to moderate income households on the EITC benefit and free tax preparation services through VITA • Help community members avoid predatory refund anticipation loans and checks • Inform taxpayers of Coalition’s financial education programs • Host meetings at your organization • Distribute Coalition outreach materials

16. Contact Info Rebecca Cardwell rebecca.cardwell@uvacreditunion.org 434-964-2001 Ext. 6813 uvacreditunion.org Internal Revenue Service www.irs.gov/Individuals/EITC-Home-Page--It’s-easier-than-ever-to-find-out-if-you-qualify-for-EITC United Way Thomas Jefferson Area www.unitedwaytja.org