To understand this program as well as its purpose and goals, one must first understand the federal Earned Income Tax Credit (EITC) itself. In the simplest sense, the EITC is a refundable tax credit for low- to moderate-income workers, returning money paid in taxes to those who are eligible, with a special emphasis placed on families with children. The idea is to essentially fight poverty, child hunger and other societal challenges by reducing the tax burden on families who do not make much money.
To put the scope of this program in perspective, consider that in 2018 it distributed $63 billion to 25 million workers and families, according to information from the Internal Revenue Service, making it one of the nation’s largest anti-poverty programs.
A problem faced by this program, however, is that families who are eligible to receive the EITC often do not claim it. In fact, in describing Code for America’s work in this area recently, the group’s interim co-chief executive Lou Moore cited some statistics that inspired them to take action. Chief among those stats was the fact that low-income households eligible for this program are leaving roughly $10.5 billion of EITC unclaimed each year. This comes out to about $1,336 per household.
So, Code for America set out to change that.
The work began in earnest last tax season, with a prototype in advance of a more formal pilot program. Part of all of this involved determining why it is that this money is going unclaimed, and what Code for America found was that the most obvious reason — lack of outreach and subsequent awareness about the program — was not the only obstacle preventing low-income families from receiving the benefits they are eligible for, Moore said.
Other obstacles include feeling overwhelmed by the idea of getting a tax credit, worrying that there will be negative consequences related to applying for the credit, not being able to find trustworthy or free help completing taxes in a way that nets the credit, and more.
What Code for America also found in its research is that there is an extant effort out there to help eligible families get the trustworthy, clarifying, thorough, free, readily accessible tax help they need. This is a program called Volunteer Income Tax Assistance (VITA), and it is the work of the IRS. Through it, the IRS also funds local nonprofits to help close the gap with the EITC as well.
VITA staffers, which are primarily volunteers, are IRS certified and able to do everything from handling audits to helping people through the EITC program. Still, some severe accessibility challenges stop it from being an effective cure for the EITC gap.
“What VITA isn’t right now is very accessible,” Moore said. “It is currently an entirely in-person experience.”
That means low-income applicants must go to a specific location during a specfic time to use it. This raises some often-difficult challenges among low-income residents, including taking time off work, securing transportation and more. But that’s where civic tech work can help.
Code for America’s pilot program is working to help VITA do things like reduce data entry, create digital tools to make intake easier, and offer a more effective and accessible web presence. Currently, the digital intake tools are slated to launch within the next week or two, and developers have already built and launched a new national website for VITA, one that people can use to find VITA help in their areas, which is at www.vitataxhelp.org.
Holistically, this all fits into the mosaic of work Code for America is already doing to support similar safety net programs in the U.S., including GetCalFresh and Clear My Record. The EITC work has an even broader potential than those to help more people, since it’s working to bridge gaps within a federal program, versus state or local. It’s also the first program Code for America has worked on with the potential to put flexible cash in the hands of families.
Looking forward, officials with the group said they plan to run this pilot through June, just past the end of tax season, and then look to making plans for next year. More information about this EITC work can be found online here.
