MADISON, Wis. — With the deadline for filing federal tax returns approaching, the Filene Research Institute has released a new study that examines how tax preparation services, corporations and nonprofit organizations can work together.
"The Economics of Serving Low-Income Employees at Tax Time: Implications for Credit Unions," explores a partnership between Progress Through Business, a nonprofit organization focused on poverty alleviation issues, and H&R Block to offer tax preparation to low-income employees of Staples, Inc. The study was conducted with funding from the National CU Foundation's REAL Solutions program. According to the study, more than 400 Staples employees took advantage of tax preparation and benefits enrollment services, reapinig immediate financial benefits in the form of higher tax credits or refunds. "The combination of tax preparation and public and private benefits enrollment also significantly increased employee participation in such employer-sponsored plans as employee stock purchase plans, 401(k) retirement plans, and tuition reimbursement programs," according to Filene.
The study further found that public benefits also increased, with higher claims for Earned Income Tax Credit, child care credits, renters credits, education credits, and other benefits aimed at low-income taxpayers. According to the study, the advantage for Staples was a reduction in employee turnover. After one full year of tracking, those who participated in the program during the 2007 tax season showed a 32% improvement in retention over those who did not participate. The authors of the study report: "For each employee who participated in this program at a cost of $75, the company saved $480," the study found.
