The pitch sounds a bit too good to be true: “Secure thousands of dollars for a low income person or family in the time it takes to watch a sitcom.” But this advertisement from the Volunteer Income Tax Assistance program, or VITA, is not advocating any kind of philanthropic scam.
Through VITA, Yale students can indeed secure an average of $1,600 for needy New Haven residents, by informing them about the the little-known Earned Income Tax Credit (EITC) and helping them fill out the paperwork to receive it. Volunteers hold tax clinics where they consult with New Haven residents and then complete the tax forms with the information they gather.
The EITC is essentially a negative tax for men and women whose incomes fall below a certain level. A person receives a tax credit based on a formula involving the amount of money he has earned and the number of his dependents. If this tax credit is greater than the amount of taxes he owes, he gets a check from the IRS. The EITC provides an incentive to work because, up to a certain point, the tax credit increases as income increases.
“It lifts more children out of poverty in the U.S. than any other program does,” VITA Coordinator Sophie Raseman ’04 said. “But it’s a low-profile program.”
In fact, the EITC is so low-profile that, according to statistics from the General Accounting Office, a quarter of those who qualify for this tax credit do not take advantage of it. And those who do receive money from the EITC often lose a large amount of it to commercial tax preparers such as H&R Block.
VITA attempts to alleviate both of these problems in the New Haven community.
“We send letters about it home with W2 forms, do public service announcements, and work with the clergy to get the word out,” Raseman said.
Once low-income residents learn about the special tax credit, volunteers from VITA help them prepare their tax statements.
Volunteers receive 10 hours of training in January. Then, from the middle of February until April 14, they prepare taxes for a few hours a week.
Raseman said she has big plans for the future of the VITA program. For the past two years, it has been run out of the mayor’s Office. But Raseman and several others are in the process of incorporating it as an independent nonprofit organization.
In addition, a new program known as the Family Wealth Initiative will take effect this year in New Haven. Under this program, 100 New Haven families will be able to put the money they receive from the EITC into special savings accounts. Their contribution will be matched by a combination of federal and private funds. VITA will help raise awareness of the program.
Last year only a handful of Yale students helped with the tax assistance program. But this year there has been more interest on campus.
“We are actively recruiting Yale students,” said Raseman. “The more the merrier.”
Those who have participated in the program seem to have enjoyed it.
“It’s a very exciting and fun initiative,” Irene Liu ’04 said. “You see the results of your contribution immediately. And you learn skills that are useful in your own life.”
Raseman hopes that as the VITA program grows, it will have strong support in the Yale community.
“It’s not the sexiest kind of volunteer work,” she said. “But you see results that are very concrete.”