AmeriCorps Members should be aware of two aspects in annual tax filing: 1. Where AmeriCorps members can obtain free tax assistance; and 2) How AmeriCorps members can help ensure people obtain free tax assistance.
1. Are you eligible for free tax assistance? Probably.
In addition, tax assistance locations, VITA (Volunteer Income Tax Assistance) sites and AARP sites, in Montana can be found here. To be eligible for tax assistance at VITA sites you must have an income of less than $49,000 per year. To be eligible for tax assistance at AARP sites you must be a taxpayer of low- to moderate-income, and there is a preference to those age 60 and over. Three of the four sponsors for this service are AmeriCorps program sponsors or sites; they are Rural Dynamics, Inc., Montana Legal Services Association, Montana Credit Unions for Community Development and Billings Metro VISTA Project.
Some issues to be aware of are the Earned Income Tax Credit and the American Recovery and Investment Act of 2009 — each of which may affect you and the people you serve.
EARNED INCOME TAX CREDIT —TAX YEAR 2009
The threshold amounts for 2009 tax returns follow:
* $13,440 ($18,440 if married filing joint) if you do not have a qualifying child
* $35,463 ($40,463 married filing jointly) if you have one qualifying child
* $40,295 ($45,295 married filing jointly) if you have two qualifying children
* $43,279 ($48,279 married filing jointly) if you have three or more qualifying children
Investment income must be $3,100 or less for the year.
The maximum EITC that can be earned for 2009 is as follows:
* $5,657 with three or more qualifying children
* $5,028 with two qualifying children
* $3,043 with one qualifying child
* $457 with no qualifying children
The average EITC claim for Montana residents in 2008 was $1,828.17.
2. How can you help ensure people we serve obtain free tax assistance? Many ways.
AmeriCorps members in Montana have an opportunity to help low-income individuals claim benefits in what has been called “the nation’s largest antipoverty program for working families.” It benefits more people than food stamps or cash welfare payments; several reputable studies claim it is more effective than raising the minimum wage. It is named the Earned Income Tax Credit (EITC).
Even though EITC is the major federal anti-poverty program, several studies have reported that millions of dollars have been left unclaimed and that many claims have been rejected due to errors. These two problems mean that somewhere around $438 to $4,824 in 2008 tax credits available for each potentially eligible low-income working family will not be received. To help enable potentially eligible people receive their tax credit, there is free tax help available at hundreds of locations across Montana. Some of these Montana locations have already listed volunteer opportunities on the national Martin Luther King service day site.
AmeriCorps members can help extend these efforts to people who need assistance in a variety of ways, including:
- Promotion at service sites
- Information sessions
- Outreach and education
- Child care support
- Volunteer at a Volunteer Income Tax Assistance site
There are private companies offering tax assistance and tax refund anticipation loans (RAL). According to an Urban Institute study, higher percentages of minorities and those without a high school education use paid preparers than the rest of the population. According to a Brookings Institute report, typical preparation costs are from $90 to $100, to file electronically add $12 to $40; typical RAL loan fees are $75 with $33 for document preparation; and, claimants without bank accounts may also incur charges averaging 3 percent ($45 for a $1,500 refund) to cash either the tax refund or the RAL check.
Some AmeriCorps members and their host sites began preparing for the 2010 tax season in December 2009. For example, there are VISTAs working at Rural Dynamics and Montana Credit Unions for Community Development to support the Free File Montana annual campaign.
To learn about free tax assistance efforts and learn how to help, check Montana‘s extensive listing of free tax assistance sites managed by the IRS‘s Volunteer Income Tax Assistants (VITA) and AARP at http://www.montanafreefile.org You can find locations, contact information and volunteer opportunities through the site. Once you know who to contact, please follow through and discuss how you can help.