COVID-19 stimulus must support free tax prep
Posted March 27, 2020 in Press Releases
In one of its more positive moves, the U.S. Senate included cash payments that will send most Americans $1,200 per person from the $2 trillion stimulus package it recently passed. However, people who are paid very low wages or don’t have any income at all may not file taxes. That’s why it’s critical that any stimulus packages include funding to support the nation’s network of free tax preparation programs that help those who most need the extra support, according to a new brief from Policy Matters Ohio.
There are two primary programs that offer free tax preparation services in Ohio: the Tax Counseling for the Elderly (TCE), which is often administered by the AARP; and the Volunteer Income Tax Assistance (VITA) program which serves tax filers with annual incomes under $56,000, people with disabilities, and those with limited English-speaking proficiency. Both receive funding and technical support from the IRS.
“These programs perform a vital service for people who have low incomes,” said Policy Matters Project Director, Kalitha Williams. “For-profit tax prep services often gouge clients with high fees and predatory products. Now, many working people who were paid low wages are suddenly without a job due to the COVID-19 pandemic. They will need help preparing their taxes to get the stimulus plan’s crucial cash support.”
The effort to prevent the spread of coronavirus shut down free tax preparation sites. The IRS extended the tax filing deadline to July 15, which could give free tax prep programs time to prepare and re-open, but they will need more funding. Although undocumented immigrants pay billions in payroll taxes, the stimulus plan leaves them out -- even those who have children who are U.S. citizens, and those who have paid income taxes using an Individual Taxpayer Identification Number (ITIN). Congress needs to expand stimulus payments to undocumented immigrants.
“Everyone who contributes to our economy should have access to COVID-19 economic relief,” Williams said. “Undocumented immigrants work in some of the fields most harmed by the pandemic and they also deserve support during this difficult time.”