Virginia CASH Campaign (Creating Assets, Savings and Hope)

The Virginia CASH Campaign is supported by a Commonwealth of Virginia General Fund appropriation of $230,000 annually to maximize use of the federal Earned Income Tax Credit. The targeted state resources incentivize community-based outreach initiatives and free tax preparation services for low income working families and individuals to assist them in receiving all EITC credits to which they are entitled.

Many persons who are homeless need access to both EITC outreach and free tax preparation services if they are to benefit from the tax credit, which also operates retroactively.

Virginia Governor Tim Kaine designated Earned Income Tax Credit Kickoff Day in January, launching events around the state to raise awareness of EITC filing resources and tax preparation services and to demonstrate political will in support of the state's consumer-focused initiative. Executive Branch agencies for housing, housing finance, and social services have also partnered to offer Virginia Individual Development Accounts (VIDA) with a 2:1 match of funds (including funds provided through the federal Assets for Independence program of HHS) for purchasing a home, starting a business, or financing post- secondary education, if the EITC filer deposits any refund of up to $2,000 in a VIDA.

The Virginia Community Action Partnership is the lead community agency for the statewide initiative, annually reporting results to the Governor and General Assembly. VACAP re-distributes state resources in mini- grants to local partners who provide education, outreach, financial literacy and free income tax preparation services to eligible EITC recipients.

The Commonwealth of Virginia estimates that Virginia taxpayers are eligible for approximately $1 billion in EITC payments annually and that 91,000 - 114,000 households do not file for a projected $167-209 million in credit refunds.

Low income working people benefit: In tax year 2005, 478,365 Virginia households benefited from EITC; the average credit amount was $1,834 per household. Free tax preparation services also can save low income workers hundreds of dollars and help them better provide for basic needs.

Virginia's residents and economy benefit: In tax year 2005, Virginians received $877,336,397 in EITC refunds. The EITC, 100% federally funded, brings money into the state's economy. Data show the most common uses of EITC refunds include medical care, dental work and car repair and purchase, all accessed through local communities.

The Virginia EITC Campaign is achieving quantifiable results for low income working filers and for the Commonwealth.

In the 2007 tax season, through VA EITC, over 860 volunteers partnered with 22 local coalitions provided free tax preparation services to eligible persons, preparing over 11,000 federal returns with refunds of over $10.6 million. Almost $4 million was claimed in EITC refunds in 2,900 returns. Volunteer tax preparation time was valued at $500,000.

According to the VA EITC 2007 annual report to the state, compared to the 2005 tax year, the 2007 outcomes represent:

• double the number of tax returns prepared
• almost a 50% increase in the number of EITC returns
• almost a $1 million increase in EITC refunds
• double the savings to taxpayers
• one -third more local coalitions partnered to the initiative

Most of the local coalitions use TaxWise to file returns and track data. Volunteers are trained and certified by the IRS. Programs report results to the VACAP EITC Project Manager, including returns prepared, total refunds, tax preparation service savings, number of EITC eligible persons, total EITC refunds, Child Tax Credit refunds, Direct Deposit refunds, Split Refunds, number of press releases and public service announcements generated, financial literacy and IDA programs, and more.

VDSS directly contacts individuals eligible for the credit but not claiming it, using client level data from tax returns where EITC was not claimed. VDSS also helps raise awareness of the EITC by printing notices on TANF and child support enforcement checks from December through April and using AmeriCorps members at the local level to conduct outreach.

In Virginia, both the Executive and Legislative branches of the Commonwealth's government have supported statewide EITC initiatives and built a strong partnership with the Virginia Community Action Partnership (VACAP), the statewide membership association for Virginia's thirty non-profit private and public community action agencies. Virginia also has a non-refundable state tax credit.

In 2003, the Virginia General Assembly's Joint Legislative Audit and Review Commission examined EITC participation by clients of the Virginia Department of Social Services (VDSS) and estimated a participation rate of only 13% of those eligible. The State has also estimated unclaimed benefits on a regional basis according to local social service offices.

Upon the recommendation of the Commission, the General Assembly amended the Code of Virginia to add a question to the state tax return form about whether a taxpayer claimed the federal EITC, and to allow the Tax Commissioner to share data with VDSS on whether clients claimed the federal EITC, enabling VDSS to measure EITC utilization and identify eligible persons who did not claim the credit.

Visit the Commonwealth of Virginia Department of Social Services web site for EITC: http://www.dss.virginia.gov/community/eitc.cgi

For local DSS Office contact information, visit: http://www.dss.virginia.gov/localagency

Or call toll-free: 800-552-3431 or by email: citizen.services@dss.virginia.gov

Visit the Virginia Community Action Partnership web site for the VAEITC Campaign and also find background information, fliers, asset building information, and more: www.vaeitc.org

Contact VCAP's EITC Project Manager at 804-644-0417.

Virginia Community Action Partnership's office is located at 700 E. Franklin Street, Suite 14T2, Richmond, VA 23219.

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