Your residents work hard every day to provide for themselves and their families. Not everyone is aware of or receives the money back they have earned. In 2023, approximately 19 percent of all eligible taxpayers didn’t claim the federal Earned Income Tax Credit (EITC). EITC and Child Tax Credit (CTC) can provide tax refunds of hundreds or thousands of dollars each year to residents. For many, these dollars help them pay off debt, secure or maintain housing and manage vehicle expenses.
At a paid tax preparer, the average cost of filing a simple tax return that includes claiming the EITC or CTC can range from $50 to $500. This amount may seem low, but it is a fee that tax filers who claim the EITC must pay to receive money that they have already earned. Additionally, in some cases, it introduces them to products that allow them to access their refund amount upfront, but at the cost of high fees, further reducing the benefit. Beyond supporting the financial stability of families, tax credits such as the EITC and CTC also have a positive impact on the local economy. Research from the Urban Institute (PDF) has found that the financial security of residents directly impacts the financial health of the municipalities in which they reside.
NLC has found that even small communities have increasingly implemented Volunteer Income Tax Assistance (VITA) programs and EITC/CTC outreach as part of their efforts to promote financial empowerment. Some cities are expanding their tax preparation assistance for individuals and are now offering similar free help to small business owners as well.
Regardless of municipal size, all municipalities can play a role in supporting their residents in securing the money they have earned by claiming the EITC and CTC through free tax preparation.
What City Leaders Can Do Now
1. Review the Data
Local leaders and their staff should review the most recent available IRS data to examine the number of residents by zip code who claim the EITC and CTC. Explore NLC’s EITC Opportunity Map to identify where it may be most effective to focus outreach or awareness efforts.
2. Engage Your Residents
The next step is to engage residents to better understand where they are going for tax services and if they are aware of no-cost options. This work can be done through outreach via social media, newsletter questions or at community events.
3. Get to Know the Service Providers That are in Your Community
Many communities across the country have non-profit groups that are operating VITA or Tax Counseling for the Elderly (TCE) sites. These sites offer free tax preparation for individuals who made less than $67,000 in 2025. These groups receive training and funding from the IRS and are looking for ways to innovate and reach more potential clients. City leaders can engage them to understand their successes from last tax season, their challenges and what they are planning for the coming tax year.
4. Engage Your Financial Community
The financial community, which includes banks and credit unions, is a partner and should be engaged similarly to VITA or TCE operators. Local leaders should understand what investments they are making to support individuals within their community in securing financial services, in particular, access to affordable and safe bank accounts. As the federal government will no longer issue paper checks, this will be an essential topic for local leaders.
5. Celebrate Community Volunteers
VITA and TCE sites rely on volunteers to serve your residents. City leaders have the opportunity to recognize and celebrate those who are providing community service. This recognition can also serve as a valuable tool, enabling providers to recruit volunteers for the upcoming tax season.
The City of Boston has published blog posts celebrating community members who volunteer at their tax site locations. This opportunity celebrates a resident giving back, but also helps others see that the municipality values their efforts.
6. Create Your Plan for the Coming Tax Season
After reviewing the data and engaging residents, providers and the financial community, city leaders should develop a plan of action. Actions can take many forms, including:
- Creating media attention through public service announcements
- Participating in an EITC Awareness Day event
- Sharing information about VITA providers and the EITC and CTC through city communication channels or community outreach events
Speaking at a tax time outreach event, Mayor Mike Duggan of Detroit, said, “Wealthy people tend to be the ones who get most of the tax breaks. But the Earned Income Tax Credit and Child Care Tax Credit are the tax breaks for thousands of working Detroiters. By simply claiming these credits on their tax returns, they could get thousands of their own dollars back from the federal government. I encourage everyone who may be eligible to come in for free tax assistance.”
Connect With Us
There is no wrong answer when developing a plan to make sure more of your residents get back the money they have earned. Connect with NLC’s Economic Opportunity and Financial Empowerment team to discuss the options your city can support to increase the uptake of the EITC and CTC for your residents via eofe@nlc.org.
More to Explore
Supporting the upcoming tax season isn’t the only action local leaders can take. Just like any program, tax time efforts need support once they are launched and throughout the tax season. Check out NLC’s blog post on Four Tax Time Opportunities for more ideas on what you can do during the tax season.
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