What they do
Foundation Communities ("FC") is a leading non-profit provider of affordable housing, asset building opportunities and educational services to families and individuals with low income in Texas.
The Challenge
The Earned Income Tax Credit ("EITC) is a refundable federal tax credit available to low wage earners - generally, families with incomes of less than $35,000. Available since the 1970's, the EITC was instituted to offset the disproportionate burden of social security taxes shouldered by these "working poor".
For 2004, some 45,000 tax returns (representing approximately 13% of all tax returns filed in the Austin area) claimed the EITC. However, the IRS estimates that another 14,000 eligible working low-income families did not claim their EITC. The average EITC is $1,700, meaning that some $24 million in available EITC did not find its way into the family budgets of the working poor in central Texas.
Many eligible Austin families fail to claim their EITC either because they are not aware of their eligibility, or due to the complexity of the application process. Of the families claiming their EITC, many pay substantial tax preparation fees and rapid loan charges to private firms.
For many years the IRS helped low-income tax filers by offering free tax preparation. However, nationally the IRS is pulling out of such community work. For 2004, the Austin Asset Building Coalition, a partnership of over 20 area social service organizations, prepared 2,500 tax returns. Without a substantial new commitment to manage this effort for 2005, it is unlikely that even this small number of families would be served.
What we funded
With a lead gift from the Silverton Foundation, FC has assumed responsibility for meaningful and permanent volunteer income tax assistance in Austin. Silverton Foundation funding will enable the creation and implementation of an innovative and aggressive program to establish "Claim + Save" Community Tax Centers.
The "Claim + Save" program will grow the number of tax returns filed from 2,500 in 2004 to over 15,000 in 2007; recruit and train 300 volunteers to serve program clients; establish five community sites with expanded hours and child care for operations; collaborate with area non-profits, community groups, employers and financial institutions in the operation and promotion of the program; and provide "financial literacy" classes and tools to help families spend their tax credit wisely.
