How Boston Helped Residents Get Bigger Tax Returns

Cities must be at the forefront of providing financial empowerment and tax equity strategies that include Volunteer Income Tax Assistance (VITA) and credit building at tax time. Using information about the Earned Income Tax Credit (EITC) to educate low and moderate-income taxpayers on the benefits of filing their tax returns while maximizing tax time for credit building and savings is a successful financial stability strategy.  Mayors’ offices should partner with key stakeholders to ensure that these services are available in their municipalities.

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Boston is one of the hundreds of cities that has been providing VITA services for close to 20 years through its VITA coalition, the Boston Tax Help Coalition. The coalition formed in 2001 based on the recognition that the City of Boston was leaving $10 million of unclaimed EITC on the table, and we were committed to getting all those dollars directly into residents’ pockets. The annual tax campaign is part of the City of Boston’s economic mobility strategy that includes Boston Saves, our Children’s Savings Account program; free financial coaching; credit building through the nation’s first municipal credit building program, Boston Builds Credit and financial inclusion through Bank On Boston. All of this work is implemented through my Office of Financial Empowerment, Boston’s OFE.

Maximizing the EITC is an integral strategy in conjunction with providing free tax services in partnership with coalition stakeholders. The EITC is a refundable credit for people who work and is a component of the federal tax code. Additionally, many states have a state EITC that provides additional dollars through a percentage of the federal credit to tax filers. The EITC is one of the most effective anti-poverty tools available to policymakers and practitionerscoupled with the child tax creditit brings over 6 million children and families out of poverty annually.

The Boston Tax Help Coalition is a multi-sector collaboration.  Four hundred volunteers provide 13,000 low and moderate-income taxpayers free tax preparation and credit building at 30 community-based partner locations annually.  Fifteen community partners work as part of the coalition’s tax team, planning each year to deliver taxes for four months out of the year, returning about $24 million dollars back into taxpayers’ pockets, acting as an economic engine for our local communities and saving taxpayers over $1 million in predatory filing fees.

Coalition programs aim to build individual agency and community empowerment by providing anti-predatory tax preparation, credit building, and other wealth-building services. The annual tax season maximizes an opportunity to provide the Financial Check-Up (FCU), a one-on-one assessment that delivers credit building and tax refund savings strategies and referrals critical for economic stability.

Lessons for other municipal leaders

Free tax preparation and credit building are fundamental services that municipal leaders and mayors can integrate into their cities’ tool kits to help their communities build financial stability. There are numerous ways to engage. Through either direct service delivery, funding partners or through assistance with a marketing campaign and using 311 to provide information to the community, there are many ways to provide a leadership role and expand impact. NLC has been at the forefront of providing technical assistance for this important movement for financial inclusion. For more information about the work in Boston, please visit the Boston Tax Help Coalition.

City of Boston Mayor WalshAbout the Author: Mayor Martin J. Walsh, an accomplished advocate for working people and a proud product of the City of Boston, was sworn in as the city’s 54th Mayor on January 6, 2014.