This commentary was originally published in the Racine Journal Times.
Imagine a community that fosters hope and opportunity for everyone, a community where people reach financial stability. A cornerstone of financial stability is, for many, their annual tax return. Tax returns are the biggest paycheck many Americans see all year; they provide a crucial windfall that helps community members budget for large expenses and supplement their monthly income. Nobody should have to question whether they can afford to pay for something as important as this, which is why United Way provides the Volunteer Income Tax Assistance (VITA) program, which offers free tax assistance and filing to low-to-moderate-income Racine County residents.
As of 2016, 40 percent of Racine County’s households were either poverty households or ALICE (asset limited, income constrained, employed) households—living paycheck to paycheck, working hard but unable to budget for all the necessities of daily living in our community. In Wisconsin, the bare-minimum Household Survival Budget is $19,848 annually for a single adult and $61,620 for a family of four. For many, that’s a high bar to attain, but VITA’s services bring the hundreds of community members it serves just a little bit closer to thriving.
VITA was reintroduced to Racine County in 2017 and has proven to be a crucial support to the Racine County economy. Taxpayers have flocked in increasing numbers to the schools and community hubs providing VITA’s services. As a result, VITA expanded by nearly 100% in all measures of success in 2018. In 2017, VITA returned more than $560,000 in tax refunds to local taxpayers; in 2018, tax refunds surpassed $1 million—funneling a collective total of $1.6 million back to our local economy in just two years.
VITA’s growth is the result of the incredible work of a small but mighty group of volunteers who staff all sites. The program’s success translated into increased opportunity for volunteers as well; volunteer time doubled to nearly 1300 hours in 2018.
To date, this program’s success is already well on its way to repeating itself for the 2019 tax season. At this time last year, 124 federal and 136 state refunds filed through VITA had been accepted, and the program provided nearly $190,000 in federal refunds. This year, returns have so far jumped to 179 federal and 208 state, and nearly $250,000 has already been returned to local taxpayers.
This growth is monumental, but how does that translate into impact for our community?
For one, VITA makes it easier to claim tax credits. Thousands of households in this county are eligible to receive tax credits, which support households by decreasing the amount of taxes they owe. However, these tax credits regularly go unclaimed. For instance, the IRS estimates that as many as one in five taxpayers do not claim the Earned Income Tax Credit, which supports working families. Oftentimes, the households that leave their tax credits on the table are low-income or don’t speak English. VITA works to offset these households’ obstacles by specifically serving households earning less than $54,000 a year and offering translation services for Spanish-speaking households.
In addition, an annual tax return, especially for ALICE households, is a crucial part of many taxpayers’ income and may mean the difference between struggling and earning enough to get by. For instance, families who earn the EITC mostly use it to pay for necessities, repair homes, and maintain vehicles necessary to commute to work, according to the center on Budget and Policy Priorities.
If you live in Racine County, you may be eligible to receive VITA’s services. Simply call 211 to check your eligibility and schedule your appointment. Appointments are required; walk-ins will not be accepted. Drop-off service is available at all sites during operational hours.
Rodney Prunty is the president of United Way of Racine County.