NORTHVILLE TOWNSHIP, Mich. — Sure, participating in the Voluntary Income Tax Assistance (VITA) program is a good people-helping-people activity, but it's also an opportunity to grow the credit union.
"The benefits for the credit unions in providing VITA sites or partnering with VITA sites have primarily to do with their mission of people-helping-people," said Michael Bridges, director of public affairs for the Michigan CU League.
"But also a VITA site often attracts community members who are unbanked, and this provides the credit unions with the opportunities to have them join the credit union as new members. But, in addition, many credit unions offer financial education sessions and/or materials to VITA site-users during the tax season."
Just File It
About 140 Michigan credit unions are offering free tax preparation to those who need it, thanks to the help of a web-based program called "Just File It."
The Michigan Credit Union League underwrote the cost of developing the software in conjunction with the Legal Aid Society of Orange County, Calif., and the Michigan Poverty Law Center.
The MCUL has paid the Legal Aid Society of Orange County to work with the Michigan Department of Treasury to put the state-certified Michigan income tax returns and all Michigan-based income tax credit applications online so that Michigan credit union members and others can go to the site, and for free, file their tax returns and apply for all their federal and state income tax credits, Bridges said. To date, 5,506 Michigan income tax filers have used the site and returned $1,374,734 in Michigan taxes refunds, $7,145,171 in federal refunds, and $2,004,205 in Earned Income Tax Credits.
"The primary reason we are providing this service for free to credit unions and their members is so that everyone who is eligible applies for and receives their Earned Income Tax Credit," Bridges said. "This is the largest entitlement program of the federal government and moves more people out of poverty annually than any other program."
In addition to offering "Just File it," to members for free, the MCUL also have several credit union members that have VITA sites at their CUs and have other CUs that partner with community-based agencies that organize and host VITA sites, Bridges said.
Wisconsin CUs Help Prevent Costly RALs
Wisconsin credit unions are hoping to help low-income tax filers this year by opening deposit accounts into which fast, free refunds can be deposited, providing a no-cost alternative to costly "refund anticipation loans" that cost taxpayers $23.4 million. Credit unions there will open deposit accounts for low-income tax filers at volunteer return preparation sites around the state, operated in partnership with the IRS, Department of Revenue and AARP. The sites offer free tax preparation, tax education and asset-building strategies to people with lower incomes, the disabled, individuals with limited English proficiency and the elderly.
"The VITA program is a program the league started to develop partnerships with the Department of Revenue an AARP about four years ago," said Jim Drogue, vice president of credit union development for the Wisconsin Credit Union League. "Some credit unions are operating VITA sites in their offices."
One thing being stressed to consumers taking advantage of the CUs' VITA sites is that by becoming a credit union member, they can have their refunds electronically sent to their credit union and directly deposited into their account at no cost, Drogue noted.
Though the primary aim is to provide an important public service, credit unions participating in VITA also have the opportunity to reach out to potential new members by pointing out how easy it is to join and the benefit of doing so.
However, Drogue stressed that attracting new members is not the main goal of the CUs offering VITA services.
"It's an opportunity to partner with other community organizations," he said.
Northeast CU in Portsmouth, N.H. is offering free tax preparation and filing services for anyone who has earned less than $39,783 in 2007. This is the second year the CU is offering this service.
"Our credit union mission is to enhance the well-being of our members," said Ramona Dow, vice president or marketing and strategic initiatives for the Northeast CU. "To us, doing this made perfect sense. We're putting money back into our members' pockets."
The CU is offering this service in partnership with the Rockingham Asset Building Coalition. The focus is to help income-eligible taxpayers secure Earned Income Tax Credits. Seven of NECU's employees volunteered to be trained by the IRS to prepare tax returns. NECU is offering this service by appointment until April 13.
"It's also an opportunity for us to develop our commitment to the community," Dow said. "Last year our goal was 100, and we did 150. This year our goal is 200, and we've already done 250.
State Employees Credit Union in Raleigh, N.C., and Local Government Federal Credit Union said together they have already helped North Carolina residents claim $6 million in tax credits and save about $700,000 in tax-preparation fees. This is the first year the credit unions have participated in this program. Two SECU employees at each branch location are trained as VITA representatives to prepare and electronically file basic tax returns.
Their main goal is to assure that eligible North Carolina residents receive special credits, such as the Earned Income Tax Credit and the Child Tax Credit, said Josh Kelly, vice president of financial advisory services for SECU.
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