Poverty in Utah is real. It doesn t have to be.

Transcription

1 2011 Annual Report Poverty in Utah is real. It doesn t have to be.

2 2011 Earn it. Keep it. Save it. Annual Report The mission of Community Action Partnership of Utah is to advocate for, support, and train Utah s CSBG funded agencies, utilizing our collective strength to eradicate poverty. Community Action Partnership of Utah October 2011 Community Action Partnership of Utah 230 South 500 West, Suite 260 Salt Lake City, UT Authors Melissa Jensen Sally Kakoti Paul Leggett Editor Melissa Jensen Layout and Design Travis Baldus Travis_jay@gmx.com A special thanks to United Way of Salt Lake, Utah Department of Community and Culture, Goldman Sachs, the Internal Revenue Service, American Express Center for Community Development, GE Money and the National Disability Institute for their ongoing partnership in this project and for providing core financial support for Earn it. Keep it. Save it. Acknowledgement Earn it. Keep it. Save it. is a collaborative effort and this report would not have been possible without the help of Dean Miner and Utah State University Extension, The Internal Revenue Service Utah SPEC Department, the volunteers who distribute and collect over10,000 surveys each year, and Dr. Jason Castillo who works to improve, analyze and tell a story with our data. An initiative of of UTAH America s Poverty Fighting Network. and dozens of Community Partners

3 TABLE OF CONTENTS Executive Summary Program Portfolio Financial Summary Earn it. Keep it. Save it. Statewide Outcomes Utah s Need for Free Tax Preparation and Financial Services Giving Credit to Utah s Working Families: The Face of the Earned Income Tax Credit Earn It Through Hard Work Helping People with Disabilities Keep It in Your Control Helping Rural Utah Save It For Tomorrow Helping Refugees and Recent Immigrants Solutions Southern Utah Coalition Bear River Coalition Davis & Morgan Coalition Salt Lake and Tooele Coalition Six County Coalition Mountainland Coalition Weber County Coalition

4 EXECUTIVE SUMMARY Community Action Partnership of Utah (CAP Utah) is pleased to present the Earn it. Keep it. Save it. annual report. CAP Utah has led this effort for the past 6 years and is excited to share the outcomes of tax season CAP Utah is the association of Utah s nine Community Action Agencies (CAAs), which provide direct services to lowincome people statewide. These nine agencies are hosts, or major partners, to the Earn it. Keep it. Save it. regional coordinators providing strength and collaboration throughout Utah. Earn it. Keep it. Save it. is committed to strengthening family financial stability through the utilization of the Earned Income Tax Credit (EITC), Volunteer Income Tax Assistance (VITA) and asset formation programs. Together CAP Utah, United Way of Salt Lake, the IRS, the State of Utah, and the dozens of additional community partners, who make up Earn it. Keep it. Save it. are working year round to provide support and opportunities to Utah s low-to moderate -income population. Tax time for working families is an opportunity one that only comes around once a year, and we are lucky to work with a group of people who help Utahns make the most out of that opportunity. Poverty is traditionally viewed as simply an inadequate amount of income, however, many families need more than a paycheck; they need assets that they can rely on in case of an emergency. A household is asset poor if it has insufficient net worth to subsist at the federal poverty level for three months in the absence of income. As many as one-third of all Utah residents do not have enough savings or wealth to cover costs for three months during periods of hardship, such as job loss or a medical emergency. This means that a third of our residents are on the verge of poverty. The current economic climate has exacerbated asset poverty, as debt and foreclosures are increasing Utah s asset poverty rate, and many assets have been lost amidst the subprime loan industry crisis and recession Earn it. Keep it. Save it. was formed to mobilize local communities and aid Utah families struggling with asset poverty. The coalition aims to assist thousands of Utah workers who are eligible to receive part of the estimated $51-70 million of EITC that goes unclaimed each year. CAP Utah and Earn it. Keep it. Save it. are working to bring more of these funds back to Utah and to the families who are entitled to them. Each year over 700 dedicated volunteers participate in the work of Earn it. Keep it. Save it. and donate thousands of hours to ensure that Utah s low-to moderate -income population get the credits and refunds that they have earned. We could not do this work without their tireless support and enthusiasm. Thank you to all of our partners and supporters for a successful tax season. We are eagerly planning for tax season 2012 and know that this work has a significant impact in alleviating the burdens so many Utahns face daily. Poverty in Utah is real. It doesn t have to be. Sincerely, Paul Leggett Executive Director 1

5 PROGRAM PORTFOLIO Mission Building partnerships to strengthen family financial stability utilizing the Earned Income Tax Credit(EITC), Volunteer Income Tax Assistance (VITA), and Asset Formation programs. About Us Earn it. Keep it. Save it. is a coalition of statewide partners from the public, private, and non-profit sectors. This coalition is lead by Community Action Partnership of Utah and works closely with the nine Community Action Agencies in Utah to carry out the mission of Earn it. Keep it. Save it. Our Approach Earn it. Keep it. Save it. implements a multi-faceted approach to serving low to moderate income Utahns. This includes Earned Income Tax Credit (EITC) outreach, free tax preparation Volunteer Income Tax Assistance (VITA), advocacy, and financial capacity building. Each aspect creates a stable and long-term path for families out of poverty. Through the work of Earn it. Keep it. Save It., and the statewide network, the needs of local communities are met making sure families are getting not only what they are entitled to, but also the support that they need. 2

6 Free Tax Preparation The Volunteer Income Tax Assistance (VITA) program offers free tax preparation for low to moderate income families. All tax preparers are volunteers and are IRS certified. In 2011 the income limit, to receive VITA services, was $49,000 This is a statewide program that saves families, on average, $200 in tax preparation fees.. Assisted Self Filing is a new approach to tax preparation. Working with national partners - One Economy - volunteers walk people through their own tax return and help them electronically file. This is crucial in assisting people to develop the skills and knowledge required to prepare their own taxes. Virtual VITA is perhaps the most innovative of Earn it. Keep it. Save it s models. This process allows rural areas of Utah to gain access to free tax preparation programs in urban parts of the state. Through the use of technology, households are benefitting from free tax preparation in a new way. Advocacy and Outreach For the past 4 years, Over the last year advocacy working closely with United involvement has increased Way of Salt Lake, Earn it. on a national level. This Keep it. Save it. has gained advocacy work focused on the support of the Utah the continued funding of the Legislature to fund this IRS VITA Grant and the program statewide. The protection of tax credits program has wide bipartisan that benefit low-income support. working households, such as the Earned Income Tax Credit. Outreach and education about the EITC are core to the mission of Earn it. Keep it. Save it. Last year a commercial with Governor Herbert spoke of VITA and the EITC. In addition the statewide and local coalitions work with over 80 partners to distribute flyers and share information about this important credit. 3

7 Financial Capacity Building With competing interests at tax time, financial capacity building can be challenging. Since 2009 a survey has been used to guide and inform Earn it. Keep it. Save it. about the needs of Utah s low-to moderate -income population, especially in regard to financial education. This survey also informs much of this report. In % of respondents wanted to know more about financial aid for education, 16% requested information on paying down debt, and an additional 14% wanted to become familiar with housing topics, including foreclosure prevention. Based on these survey results, coalitions work on a local level to address financial needs. In 2011 there was an emphasis on pre-paid debit cards for the unbanked, savings bonds, and financial counseling referrals. In addition educational materials about Utah Saves and the Believe Campaign were distributed. FINANCIAL SUMMARY Today Earn it. Keep it. Save it. is a strong statewide network, however it started as a small grassroots effort. Many of those initial partners are still here, working harder than ever. Earn it. Keep it. Save it. is truly a collaborative effort with ever increasing support from a wide variety of partners Primary Partners AAA Fair Credit Foundation Bear River Association of Governments Community Action Services and Food Bank Ogden Weber Community Action Program Family Connection Center Five County Association of Governments Community Action Program Real Economic Impact Tour National Disability Institute Six County Association of Governments RSVP State Department of Community and Culture Utah State University Extension United Way of Salt Lake United Way Utah County Utah Individual Account Network Wells Fargo Zions Bank EARN IT. KEEP IT. SAVE IT. FUNDING STATEWIDE Federal Funding $130,000 State Funding $92,700 Local Grants $90,000 National Grants $4,500 TOTA L $317,200 INVESTMENT IN LOCAL COALITIONS Tax Preparation $144,124 Asset Development $19,870 Additonal Money Raised Locally $60,000 Serving people with disabilities $4,134 TOTA L $228,128 INVESTMENT IN LOCAL COALITIONS Asset Development 9% Additonal Money Raised Locally 26% Tax Preparation 63% Serving people with disabilities 2% 4

8 Box Elder, Rich and Cache County Coalition Bear River Association of Governments Weber County Coalition Ogden- Weber Community Action Partnership Davis and Morgan County Coalition Family Connection Center Salt Lake and Tooele County Coalition Community Action Partnership of Utah Utah, Summit, and Wasatch County Coalition United Way of Utah County Millard, Wayne, Juab, Sanpete, Sevier, and Piute County Coalition Six County Association of Governments Kane, Garfield, Iron, Washington, Beaver, and County Coalition Five County Association of Governments COMMUNITY ACTION PARTNERSHIP OF UTAH COALITIONS COMMUNITY ACTION PARTNERSHIP OF UTAH COLLABORATIONS Internal Revenue Service United Way of Salt Lake Utah Department of Community and Culture AAA Fair Credit Foundation Information and Referral Utah State University Extension Offices 5

9 EARN IT. KEEP IT. SAVE IT. STATEWIDE OUTCOMES TAX YEAR 2010 TAX SEASON 2011 Native Other 4% African American 2% American 2% Asian 4% Hispanic 11% 10% Earn it. Keep it. Save it. Service Population 7% 13% 23% 55% 45% Male Female Ederly People with Disabilities Refugees and Recent Immigrants Rural Populations Head of Household 13% Filing Status of Earn it. Keep it. Save it. Service Population Single 55% Caucasian 77% Married 30% Married - Filing Separately 2% SERVING STUDENTS Students Served 23% Average Education Credit $659 Total Education Credit $1,191,241 SERVING PARENTS AND CHILDREN Child Tax Credit Distributed 21% Average Child Tax Credit $1,480 Total Child Tax Credit $4,342,427 TAX RETURN TOTALS FOR UTAH TAX SEASON 2011 Total Returns Total Total EITC Returns Total EITC Total Volunteers Volunteer Hours STATEWIDE COALITION TOTAL 14,500 $23,140,792 4,667 $7,616, ,179 Stand Alone Colleges and Universities - CEU Blanding, CEU Price, University of Utah & Utah State University 970 $381, $192,340 Unknown Unknown The Beehive 322 $540, $136,225 NA NA TOTA L 15,792 24,063,300 4,923 $7,945, ,179 age Change from % % 8.50% 17% 18.80% Change from 2005* 50% 150% 81% 106% 41% 65% * change for total volunteers is from 2006 and percent change in volunteer hours is from 2007 MAJOR REFERRALS TO EARN IT. KEEP IT. SAVE IT. PARTNERS Utah Saves Individual Savings Accounts Budget Paying Down Debt/Loans Financial Aid

10 UTAH S NEED FOR FREE TAX PREPARATION AND FINANCIAL SERVICES In % (over 300,000) of low-income Utah households paid a preparer to do their taxes; 49% filed their own returns, with the remaining 4% using free tax preparation services to prepare their tax returns. 1 For families who depend on a tax return to get ahead the fees associated with paid tax preparation can be detrimental to their ability to increase their income. In addition, of those surveyed 13% took out a rapid anticipation loan, which may amount to over 300% in interest charges. 2 This highlights not only the need for awareness about free tax preparation but also indicates that many Utah households have a need for assistance with financial capacity building. The yearly tax refund presents a unique opportunity for financial capacity building, however with the majority of low-income households utilizing paid preparers, they are left without the needed additional support to further use their refund to get out of poverty. In 2010 CFED, a research organization, ranked Utahns 47th in their ability to sustain assets, meaning that in the face of a job loss a household would be pushed into poverty. 3 In 2011 the average simple tax return cost over $ Earn it. Keep it. Save it. serves less than 5% of the Utah s low-income population through VITA, leaving a huge population that could benefit from these services. 5 A recent study showed that 35% of young adults would rely on credit cards in case of income loss and 43% of all respondents indicated they would withdraw early from their 401 K. 6 Nearly half of all families that claim the EITC only do so for one year. 7 Each VITA volunteer is certified by the IRS as a tax preparer. Approximately $3 million is saved in tax preparation fees annually by tax filers using VITA sites. 8 I could not afford to pay to have my taxes prepared and truly do not know what I would have done if the program didn t exist. I am thankful and impressed by the volunteers who give up their time to prepare my taxes for free, and I am considering volunteering to return the favor for what has been done for me. - Kelly (Below) This program is dedicated to addressing the needs of our communities. Taxes, while not always popular, create a chance for families. Taxes offer hope, and Earn it. Keep it. Save it. works everyday to make sure that hope is met with opportunity. 1 Low-Income Market Segment Report 2007, Internal Revenue Service. 2 Check City Website, 3 Corporation for Enterprise Development, Asset Policy Scorecard for Utah. 4 This estimate is based on annual reports of commercial tax businesses and the National Association of Tax Professionals. 5 Low-Income Segment Report, 2007, Internal Revenue Service 6 EARN Research Institute Poll 2010, More than Half of American Families do not have Financial Safety Net. 7 Tim Dowd and John B. Horowitz. Income Mobility and the Earned Income Tax Credit Short-Term Saftey Net or Long-Term Income Support. 8 National Association of Tax Professionals

11 GIVING CREDIT TO UTAH S WORKING FAMILIES: THE FACE OF THE EARNED INCOME TAX CREDIT The Earned Income Tax Credit (EITC) is a refundable federal income tax credit for low -to moderate -income working individuals and families. Congress originally approved the tax credit legislation to offset the burden of social security taxes and provide an incentive to work. This credit was created under President Nixon, implemented by President Reagan, and has since maintained wide bipartisan support. The Internal Revenue Service (IRS) estimates that 20 to 25% of qualifying workers miss out on thousands of dollars every year because they fail to claim the credit. The EITC can reduce taxes and often results in a refund, even if the worker had no tax withholding. In simple terms, the EITC helps workers keep more of what they earn. Earn it. Keep it. Save it. utilizes its statewide strength to reach out to the EITC eligible population and aims to increase the number of households that claim this credit. * Data from 18 year period. ages are for consecutive years. Tim Dowd and John B. Horowitz. 'Income Mobility and the Earned Income Tax Credit Short-Term Saftey Net or Long-Term Income Support'. While taking classes full time this past year, so that Ben could graduate, we survived on an income below $30,000. For this reason, we received nearly the full amount of the EITC - almost $5,600. Receiving this credit has enabled us to stay afloat. We were able to create an emergency fund, pay off much of our overwhelming debt, and pay for groceries that we may have otherwise had to go without. For us, receiving the EITC made an enormous difference in our ability to take care of our family. The EITC has given us the chance to focus more of our time on our class work and the ability to take control of our finances. - Erica and Ben (Right) 2011 EITC OUTCOMES EITC Returns 4,923 Dollar Amount of EITC $7,945,118 Average EITC $1,689 PERCENT OF TOTAL RETURNS Total Returns 31% Total Refund Amount 33% EITC OUTREACH Flyers Distributed 108,909 Public Partners 32% Private Partners 20% Non Profit Partners 48% Most EITC Recipients Get the Credit for 2 Consecutive Years or Less* 1 year 41% 5 or more years 20% 2 years 19% 3-4 years 20% Thanks to the additional funds from our refund from the Earned Income Tax Credit (EITC) we can better our lives and prepare for the future by creating an emergency fund, keeping up on our bills, replacing the fire alarms in our home, and for the first time, create a garden to reduce our spending on groceries. - John and Melanie (Right) 8

12 EARN IT THROUGH HARD WORK For many Utah families there has been little difference between recession and recovery. Households continue to struggle; jobs are scarce and income insufficient. Many Utahns are unable to maintain a job with a sufficient income. In fact, 62% of VITA clients reported holding one job only 9 (Figure 1). The overall Earn it. Keep it. Save it. population reported an income of less than $20,000 a year, 10 well below the federal poverty guidelines for a family of four % expressed a desire to work but reported they were unable to find suitable employment (Figure 2). Furthermore, the survey data also indicates that under 50% of VITA clients were supporting at least one person and 35% were supporting two or three additional people (Figure 3). Utahns are striving to improve their economic standing through hard work, 3% of respondents reported working four jobs as an attempt to improve their financial situation. For these families the relief from paying for tax preparation, paired with tax credits and refunds, offers the only opportunity to catch up or get ahead financially. FIGURE 1 Five-Plus Jobs Four Jobs Three Jobs Two Jobs Number of Jobs Held in % 3% 9% 22% FIGURE 2 Involuntarily Unemployed during 2010 Yes 22% No 78% One Job 62% 0% 10% 20% 30% 40% 50% 60% 70% FIGURE 3 People being Supported by Taxpayer 60% 50% 48% 40% 30% 23% 20% 10% 12% 9% 8% 0% 1 Person 2 People 3 People 4 People 5+ People EARNINGS OF EARN IT. KEEP IT. SAVE IT. CLIENTS Average Income $19,381 Rural Average Income $18,806 Urban Average Income $19,818 9 Earn it. Keep it. Save it Intake and Survey Data. 10 Internal Revenue Service, TaxWise 2011 Income Reports. 11 Federal Register, Vol. 76, No. 13, January 20, 2011, pp

13 Helping people with disabilities People with disabilities may be one of the hardest working, most underpaid, groups in the country. Often the disabilities people have are widely varied making programs and supports difficult to create. In fact, the median income of a person with a disability is half of that of a person without a disability, at just above $16,000. Furthermore, employment is a challenge for people with disabilities and 46% of taxpayers with a disability reported being under or unemployed. 12 People with disabilities face a number of diverse barriers but tax preparation shouldn t be one of them. Over the past four years Earn it. Keep it. Save it. has partnered with the Real Economic Impact Tour 13 trying to create a path for Utahns with disabilities to free tax preparation and asset development. While challenges continue, Earn it. Keep it. Save it. is partnering more than ever with organizations that serve people with disabilities. This is only one step toward helping people with disabilities earn and keep more (Figure 4 and 5). PEOPLE WITH A COALITION DISABILITY SERVED Davis and Morgan 135 Northern Utah 33 Weber 305 Six County Area 35 Salt Lake and Tooele 570 Southern Utah 131 Mountainland Area 237 T O TA L 1446 % OF TOTAL RETURNS 9% Source: 2011 TaxWise Data. Preparer Field 11. Having heard about the VITA program through a friend at BYU, we were at first very skeptical about the free tax service. After researching the program on our own we decided to give it a try and were pleasantly surprised. After having our return prepared by a friendly and helpful volunteer, we were very excited to find out that our refund was supplemented by the Earned Income Tax Credit (EITC) in the amount of $3,000. Receiving this extra stimulus has created a great opportunity for us. Not only were we able to pay off our current rent contract in advance, but with the remaining amount we are able to fly to Maryland where we will attend a national conference held by the National Institute of Health. The conference we will be attending will be showcasing four of the leading doctors in the field of holoprosencefalia, and we will not only be able to learn more about our daughters condition, but we will have an opportunity to have one-on-one time with specialists who will be providing tests and doing research to determine why our daughter has outlived her expectancy and hopefully help others in the future. - Jose and Gabriela (Their children Right) People with Disabilities Served by County FIGURE 4 FIGURE 5 Southern Utah 9% Mountainland Area 16% Salt Lake and Tooele 40% Davis and Morgan 9% Northern Utah 2% Weber 21% Six County Area 3% 12 Taxpayers with Disabilities 2010 Report, IRS SPEC Wage and Investment Research and Analysis, September The Real Economic Impact Tour is part of the National Disability Institute. 10

14 KEEP IT IN YOUR CONTROL As Utah households are working hard to earn money, Earn it. Keep it. Save it. wants to make sure that they have methods to keep more of that money, safely and at no cost. The main tool that Earn it. Keep it. Save it. provides to people as a mechanism to save money is free tax preparation services. At least 50% of VITA clients returned in 2011, and every year approximately 16% of VITA clients are new and had previously paid, at times, over $200 for a simple return 14 (Figure 6). Earn it. Keep it. Save it. continues to create avenues for clients to keep control of their money, beyond the savings associated with not paying tax preparation fees. In 2011 nearly 10,000 VITA clients used direct deposit as the method to access their tax refunds, an indicator that they are familiar and confident in their banks. 15 For those without a bank account, Zions bank offers free check cashing vouchers. This partnership provides an opportunity to clients to begin a relationship with a bank. For some clients, either those who are on the Chex System (blocking them from banking because of poor credit or fraud) or those who place a mistrust in banks (many times immigrants or refugees who never relied on banks) there is also the option of having their tax refund deposited to a low-cost pre-paid debit card. During the 2011 season 50 pre-paid debit cards were distributed. 16 Each of these efforts is geared toward giving households the tools and products they need to control their money. Often times a tax refund will exceed $2,000, it is important that households are provided with a way to manage that money outside of cash. This is the second step, after earning money, to helping families think about their future, believing they can control that future, and in some way making a step toward building a future. Helping rural Utah Low-income taxpayers in rural areas have limited access to free tax preparation compared to their urban counterparts. Utah s innovative approach to solving this problem, called Remote File, has received national attention and an IRS endorsement. Taking advantage of online technology to compensate for the lack of certified tax preparation volunteers in rural counties, local coalitions have reached hundreds of rural, and previously under-served taxpayers. Before this approach some VITA clients drove over 100 miles each way to get help. Others relied on paid preparers whose fees were ultimately more than their small refunds. Remote File is a collaboration between urban Earn it. Keep it. Save it. coalitions and rural partners who are willing to facilitate sites in their communities allowing VITA clients attend local sites in their communities. The Remote File model works as follows - the local volunteer assists the client in filling out tax paperwork and then uploads all of the required information to an online sharing site. A certified VITA volunteer at an urban VITA site then prepares the return. Once complete, the local volunteer has the client sign the relevant paperwork ready for filing. This model was initially developed four years ago by the Earn it. Keep it. Save it. Mountainland Coalition. They formed a partnership with the Beta Alpha Psi student accounting group, at Brigham Young University and this group continues to provide many of the certified volunteer preparers. Utah State University Extension offices in remote areas facilitate most of the rural intake sites. The Internal Revenue Service identified this model as a best practice and has since renamed the procedure Virtual VITA and is currently training its staff across the nation to assist VITA coalitions interested in adopting the program. The IRS has also expanded its application beyond rural areas to include any taxpayers who might have difficulty reaching a traditional VITA site. 14 This estimate is based on annual reports of commercial tax businesses and the National Association of Tax Professionals. 15 Internal Revenue Service TaxWise Reports, Figure 11

15 How People had their Taxes Done Last Year FIGURE 6 Did Not File 10% Family or Friend 11% Paid a Business 16% My Own 12% VITA Site 41% Another Free Place 10% FIGURE 7 Where Clients Cash their Paycheck 60% 50% 40% 30% 20% 10% 0% 3% 0% 0% 51% 48% 4% Grocery Store/Market Payday Lender Family/friend Cash It Bank/Credit Union Direct Deposit Other Total Returns REMOTE FILE OUTCOMES Total Refund EITC Refund Tax Preparation Amount Amoutn Fees Saved 451 $526,000 $213,000 $62,000 FIGURE 8 FIGURE 9 TAXPAYER COMFORT LEVEL WITH REMOTE SERVICES* Tax Preparation Method Taxpayers All taxpayers Under Age 50 Taxpayers Over Age 50 Virtual VITA Face-to-face *5 repesents the highest comfort level 12

16 SAVE IT FOR TOMORROW For many, the word assets is vague, not measurable, and at times confusing. For each person an asset means something different. Earn it. Keep it. Save it. believes that assets are opportunities or pathways. This means an asset could be a cell phone, car insurance, emergency fund or even paying down debt because each item is part of the path out of poverty. For families with very low-incomes, tomorrow is often all they can think about; at tax time Earn it. Keep it. Save it. helps households think about tomorrow and what difference they can make in that future, today. The low to moderate income population is no exception to the value of savings or asset development. The 2011 survey data indicated that a priority for households is understanding financial aid for continuing education. People understand that the job market is competitive and as such they are searching for methods to increase their ability to advance in Utah s employment market. Furthermore, it is evident that paying down debt and budgeting go handin-hand for many Earn it. Keep it. Save it. clients (Figure 9). Many families are not earning enough, trying to get by, and want the information necessary to do so. When families have the information or means to do more with their money they do. In 2011, Earn it. Keep it. Save it. distributed products to families that would provide both an investment in their future and their bank accounts. Such products included pre-paid debit cards, signing up as a Utah Saver, or purchasing a Savings Bond (Figure 11). FIGURE 10 Earn it. Keep it. Save it. Clients Requested Information Other Small Business Housing Pay Loans Financial Aid Banking Utah Saves Pay Debt Budget 2% 13% 10% 12% 16% 18% 19% 19% 28% 0% 5% 10% 15% 20% 25% 30% FIGURE 11 FINANCIAL PRODUCTS DISTRIBUTED Savings Pre-paid Utah Savers Signed Up Bonds Debit Cards at Sites

17 Survey data indicated that households planned on buying a variety of assets with their tax refund. Particularly the planned purchase of an education, a car, and/or a computer tell a story about the direction of low to moderate income families (Figure 10). They want to be reliable, and in a rural state a car will help them do that. They want to be more job ready and in a state where household s in poverty have lower educational levels, an extended education will give them more skills. 17 They want to be connected, and nothing connects a person more than the Internet, which families can have more access to with a computer. Low to moderate income Utahns are working hard to make sure that they do their part in working toward a more stable Utah and Earn it. Keep it. Save it. is one part of that puzzle. Saving money is not just about having a bank account it is also about having an opportunity to build a healthier financial future. One time a year, tax time, households have an opportunity to utilize an increase in income to take a step toward their financial goals. These steps are different for each household but are equally meaningful for all households. Through this journey Earn it. Keep it. Save it. strives to continue to understand the needs of communities and help households help themselves. This is the promise of Community Action and asset development helps us deliver that promise. We have really seized this opportunity to prepare for the future. We first used our refund to pay down our debt and invest several thousand dollars into savings. This is a great feeling knowing that if something was to happen to our car, we could afford repairs. We also used our extra funds to catch up on our medical checkups and dental visits. John was even able to have a much need root canal, and I (Dana) started investing in an Individual Development Account (IDA) that I plan on using to get my nursing degree. None of this would have been possible without the EITC and the help we received through the VITA program. - John and Dana (Above) 17 Community Action Partnership of Utah, Poverty Report 2011, Education and Poverty. 14

18 Helping refugees and recent immigrants in Utah The majority of clients that Earn it. Keep it. Save it. serves are born and raised with an understanding that one must pay taxes. However, over the past few years the assumption that everyone knows and understands that taxes must be filed has changed. Utah is now home to a higher number of refugees and recent immigrants than ever before. For this part of the population, taxes can be overwhelming and confusing. Earn it. Keep it. Save it. works with this population to help them understand the purpose of taxes, how to fill out employer tax forms, and what items are needed to file taxes. Refugees In total, roughly 25,000 refugees have been resettled in Utah, with the largest groups coming from Somalia, Sudan, and Bosnia. From 2000 to 2009 more than 8,100 refugees have settled in Utah. 18 During the 2011 filing season Earn it. Keep it. Save it., in conjunction with David Eccles School of Business, hosted two tax fairs to work with the refugee population at Horizonte Instruction and Training Center. These two fairs, along with the regular VITA sites, resulted in 75 refugee households being served. In 2010, 32 returns were prepared for the refugee population, totaling $39, of these returns were eligible for the EITC and claimed a combined total of $15,842. Earn it. Keep it. Save it. is dedicated to working with this diverse population in both helping them understand taxes and ensuring they get the refunds and support they need to succeed. Immigrants Immigrants make up a significant part of the population and economy, in the state of Utah. According to the 2010 United States Census, more than 218,000 persons in the state of Utah are foreign-born with almost 60% coming from Latin America. Also in 2010, close to one-third of immigrants were naturalized (American Immigration Council, July 2010). Many of the immigrant population in Utah face specific challenges including language and cultural barriers that prevent them from accessing basic daily living services such as state, county, and city programs. 19 In 2011, Earn it. Keep it. Save it. served 617 recent immigrants who indicated they had been in the U.S. less than 5 years. During this past tax season Earn it. Keep it. Save it. hosted one Spanish Speaking Fair to meet the unique needs of the Spanish speaking community. Often immigrant populations face language barriers that prevent access to services. Earn it. Keep it. Save it. has enjoyed the many language capabilities of VITA volunteers to decrease this barrier and over 20 VITA sites have at least one Spanish speaking volunteer and many sites have volunteers that speak other languages. Furthermore, Spanish is the main language, second to English, spoken by clients. Nearly 2,000 VITA clients specified Spanish as the primary language spoken at home. In addition, 741 VITA clients indicated a number of other languages as their primary language spoken at home, highlighting a need to provide services in more diverse languages or dialects Utah Department of Workforce Services. Office of Refugees 19 Utah Latino Center TaxWise Language Question Preparer Field.

19 SOLUTIONS While there can never be a single solution that meets each need and answers every problem, there are solutions that can collectively help families move from poverty to financial capability. Earn it. Keep it. Save it. Solutions In order to increase the reach and capacity of Earn it. Keep it. Save it. more attention and growth among rural volunteers is needed. Throughout Utah additional collaboration is needed between financial partners. While Earn it. Keep it. Save it. has a wide network of partners there are still gaps in services and information. Financial capacity building is in need of program growth at VITA sites. Earn it. Keep it. Save it. is hoping to increase the one-on-one attention to clients through an increase in the volunteer base. Utah Solutions Innovation in product development/services is needed. Low to moderate income populations have different spending and savings habits. It is crucial that programs and financial institutions looks for alternative products to compete with check cashing services and other predatory practices. The Utah State Legisalture needs to continue its support of EITC outreach and the associated state funding, which supports Earn it. Keep it. Save it. A renewed focus must be placed on people with disabilities, refugees, and immigrants in order to understand which financial capacity building practices work for each group. The development of a state EITC would be beneficial in assisting families in getting out of poverty. Federal Solutions During the discussion of tax reform the Earned Income Tax Credit needs to be protected. These credits are an investment in our economy and help subsidize low-income workers. The VITA Act of 2011 requires continued support. This act focuses on the support of federal grants to the VITA program. The act also looks at innovative ways to grow the support of VITA sites throughout the country. 16

20 Bear River Association of Governments of UTAH America s Poverty Fighting Network. Poverty in Utah is real. It doesn't have to be Ogden Weber Community Action Partnership Family Connection Center Salt Lake Community Action Program Community Action Services & Food Bank Uintah Basin Association of Governments Six County Association of Governments Southeastern Utah Association of Governments Five County Association of Governments 17

21 Five County Association of Governments Beaver, Iron, Washington, Garfield & Southern Utah Coalition Kane Counties Total $3,826,343 Total EITC $982,430 Returns Total 2,350 Total EITC 609 Rural Communities 2,350 Refugee 63 People enrolled Utah Savers Total 15 Volunteers Total 147 Total hours 7,360 Total Certified 134 Outreach Total 27,000 Rural areas 15,000 Calls to Sites Open sites 16 Demographics Gender M 50.5 F 49.5 Race/Ethnicity African American 1.2 Asian 1.7 Caucasian 88.4 Hispanic 4 Native American 1.8 Other 2.8 Annual Income Average $21, Full Time Student Yes 42.7 No 57.3 Households Involuntarily Unemployed in 2010 Yes 17.3 No 82.7 Number of Jobs held in Demographics (cont.) Number of People being Supported Filing Status for 2011 Married (filed jointly) 34.4 Single 57.2 Married (filed separately) 3.3 Head of Household 5.7 Widow/er 2.7 What People Want to Know More About Budget 13.3 Pay Down Debt 15.4 Utah Saves 8.1 Banking 11.4 Financial Aid 36.4 Pay Down Loans 20.1 Housing 14.5 Small Business 11.7 Other 1.6 Taxes Done in 2010 Here 33.7 Another Free Place like This 3.9 My Own 16.5 Family or Friend 16.5 Did not file 12.8 Paid a Business 17 Where People Cash their Paycheck Grocery Store/Market 1.8 Payday Lender 1 Family/Friend cash it 0.5 Bank/Credit Union 53.7 Plan on Buying with Tax Direct Deposit 47.4 Other 1.4 Home 8.9 Car 26.6 Education 69.5 Small Business 6.2 Computer

22 Bear River Association of Governments Box Elder, Cache, Bear River Coalition & Rich Counties Total $783,294 Total EITC $315,397 Returns Total 385 Total EITC 163 People enrolled Utah Savers Total 40 Volunteers Total 18 Total hours 450 Total Certified 15 Outreach Total 3808 Calls to Sites Open sites 4 Demographics Gender M 48.7 F 51.3 Race/Ethnicity African American 0 Asian 6.3 Caucasian 86.3 Hispanic 1.3 Native American 5 Other 1.3 Annual Income Average $17, Full Time Student Yes 30.5 No 69.5 Number of Jobs held in Households Involuntarily Unemployed in Yes 16.7 No 83.3 Demographics (cont.) Number of People being Supported Filing Status for 2011 Married (filed jointly) 31.6 Single 49.4 Married (filed separately) 5.1 Head of Household 12.7 Widow/er 3.8 What People Want to Know More About Budget 18.3 Pay Down Debt 19.7 Utah Saves 12.7 Banking 5.6 Financial Aid 29.6 Pay Down Loans 18.3 Housing 16.9 Small Business 9.9 Other 2.8 Taxes Done in 2010 Here 19.8 Another Free Place like This 16 My Own 18.5 Family or Friend 12.3 Did not file 12.3 Paid a Business 21 Where People Cash their Paycheck Grocery Store/Market 2.5 Payday Lender 0 Family/Friend cash it 0 Bank/Credit Union 50.6 Direct Deposit 48.1 Other 3.8 Plan on Buying with Tax Home 12.8 Car 19.1 Education 61.7 Small Business 10.6 Computer 17 19

23 Family Connection Center Davis & Morgan Coalition Davis & Morgan Counties Total $1,970,980 Total EITC $720,249 Returns Total 1,194 Total EITC 403 Immigrants/Refugees 50 Rural Communities 32 People enrolled Utah Savers Total 25 Volunteers Total 80 Total hours 2,963 Total Certified 62 Outreach Total 11,251 Total rural 1350 Calls to ,270 Sites Open sites 13 Demographics Gender M 45.3 F 54.7 Race/Ethnicity African American 3.1 Asian 5.4 Caucasian 77.7 Hispanic 8.5 Native American 1.4 Other 3.9 Annual Income Average $21, Full Time Student Yes 10.2 No 89.8 Number of Jobs held in Demographics (Cont.) Households involuntarily unemployed in 2010 Number of People being Supported Yes 24.1 No Filing Status for 2011 Married (filed jointly) 26.7 Single 52 Married (filed separately) 5.7 Head of Household 13.3 Widow/er 7.8 What People Want to Know More About Budget 18.6 Pay Down Debt 19.2 Utah Saves 12.8 Banking 7.1 Financial Aid 26 Pay Down Loans 16.7 Housing 16.7 Small Business 12.8 Other 1.8 Taxes Done in 2010 Here 35.1 Another Free Place like This 16.3 My Own 12.9 Family or Friend 9.6 Did not file 8.8 Paid a Business 18.4 Where People Cash their Paycheck Grocery Store/Market 4.6 Payday Lender 1.9 Family/Friend cash it 1.3 Bank/Credit Union 39.6 Direct Deposit 57.7 Other 2.9 Plan on Buying with Tax Home 13.4 Car 34.8 Education 46.8 Small Business 0.6 Computer

24 Community Action Partnership of Utah Salt Lake and Tooele Coalition Salt Lake & Tooele Counties Total $6,838,644 Total EITC $2,486,530 Returns Total 4,512 Total EITC 1,572 Immigrants/Refugees 764 Rural Communities 76 People enrolled Utah Savers Total 20 Volunteers Total 166 Total hours 7,293 Total Certified 142 Outreach Calls to ,642 Sites Open sites 27 Demographics Gender M 40.9 F 59.1 Race/Ethnicity African American 2.8 Asian 4.7 Caucasian 63.6 Hispanic 19.2 Native American 2.5 Other 7.2 Annual Income average $18, Full Time Student Yes 11.7 No 88.3 Households Involuntarily Unemployed in 2010 Yes 24.6 No 75.4 Number of Jobs held in Demographics (cont.) Number of People being Supported Filing Status for 2011 Married (filed jointly) 19.1 Single 59.2 Married (filed separately) 6.5 Head of Household 16 Widow/er 2.4 What People Want to Know More About Budget 15.4 Pay Down Debt 16.2 Utah Saves 12.3 Banking 11.6 Financial Aid 21.6 Pay Down Loans 10.3 Housing 14.4 Small Business 11 Other 2.4 Taxes Done in 2010 Here 48.9 Another Free Place 18.2 My Own 7.3 Family or Friend 7.2 Did not file 7.5 Paid a Business 10.9 Where People Cash their Paycheck Grocery Store/Market 7.4 Payday Lender 2.2 Family/Friend cash it 1 Bank/Credit Union 39 Direct Deposit 51.7 Other 3 Plan on Buying with Tax Home 7.5 Car 32.3 Education 40.9 Small Business 7 Computer

25 Six County Association of Governments Juab, Millard, Sanpete, Sevier, Piute & Six County Coalition Wayne Counties Total $214,532 Total EITC $67,507 Returns Total 216 Total EITC 72 Rural Communities 216 People enrolled Utah Savers Total 5 Volunteers Total 10 Total hours 500 Total Certified 11 Outreach Total 3000 Calls to Sites Open sites 8 Demographics Gender M 50 F 50 Race/Ethnicity African American 0 Asian 0 Caucasian 91.3 Hispanic 0 Native American 8.7 Other 0 Annual Income Average $7, Full Time Student Households involuntarily unemployed in 2010 Yes 17.4 No 82.6 Yes 60 No 40 Number of Jobs held in Demographics (cont.) Number of People being Supported Filing Status for 2011 Married (filed jointly) 18.2 Single 77.3 Married (filed separately) 0 Head of Household 4.5 Widow/er 0 What People Want to Know More About Budget 0 Pay Down Debt 5.9 Utah Saves 11.8 Banking 0 Financial Aid 5.9 Pay Down Loans 5.9 Housing 5.9 Small Business 0 Other 0 Taxes Done in 2010 Here 60.9 Another Free Place like This 4.3 My Own 4.3 Family or Friend 21.7 Did not file 0 Paid a Business 8.7 Where People Cash their Paycheck Grocery Store/Market 36.4 Payday Lender 0 Family/Friend cash it 0 Bank/Credit Union 63.6 Direct Deposit 0 Other 0 Plan on Buying with Tax Home 33.3 Car 0 Education 66.7 Small Business 0 Computer 0 22

26 United Way Utah County Mountainland Coalition Utah, Wasatch & Summit Counties Total $6,179,026 Total EITC $1,808,957 Returns Total 3,065 Total EITC 1,056 Immigrants/Refugees 70 Rural Communities 172 People enrolled Utah Savers Total 32 Volunteers Total 228 Total hours 4,383 Total Certified 178 Outreach Total 21,450 Total rural 2,900 Calls to Sites Open sites 17 Demographics Gender M 42.9 F 57.1 Race/Ethnicity African American 0.7 Asian 3.5 Caucasian 79.7 Hispanic 11 Native American 1.8 Other 3.3 Annual Income average $22, Full Time Student Yes 17.7 No 82.3 Households involuntarily unemployed in 2010 Yes 24.7 No 75.3 Number of Jobs held in Demographics (cont.) Number of People being Supported Filing Status for 2011 Married (filed jointly) 42 Single 39.2 Married (filed separately) 4 Head of Household 15 Widow/er 4.6 What People Want to Know More About Budget 26 Pay Down Debt 21.3 Utah Saves 15.4 Banking 10.6 Financial Aid 27.2 Pay Down Loans 16.6 Housing 22.7 Small Business 17 Other 1.3 Taxes Done in 2010 Here 46.4 Another Free Place like This 10.6 My Own 10.5 Family or Friend 8.7 Did not file 6 Paid a Business 18.6 Where People Cash their Paycheck Grocery Store/Market 3.9 Payday Lender 1.9 Family/Friend cash it 0.4 Bank/Credit Union 42 Plan on Buying with Tax Direct Deposit 56.3 Other 2.6 Home 13.9 Car 25.9 Education 51.4 Small Business 9.5 Computer

27 Ogden Weber Community Action Partnership Weber County Coalition Weber County Total $3,327,973 Total EITC $1,235,483 Returns Total 2,238 Total EITC 792 Immigrants 25 Refugees 61 People enrolled Utah Savers Total 72 Volunteers Total 72 Total hours 2,226 Total Certified 62 Outreach Total 27,000 Calls to ,157 Sites Open sites 7 Demographics Gender M 43 F 57 Race/Ethnicity African American 3 Asian 4 Caucasian 65 Hispanic 20 Native American 2 Other 5 Annual Income Average $19,178 Full Time Student Yes 14 No 86 Number of Jobs held in 2010 Households Involuntarily Unemployed in Yes 22 No 78 Demographics (cont.) Number of People being Supported Filing Status for 2011 Married (filed jointly) 24 Single 53 Married (filed separately) 4 Head of Household 14 Widow/er 4 What People Want to Know More About Budget 14 Pay Down Debt 16 Utah Saves 9 Banking 8 Financial Aid 18 Pay Down Loans 11 Housing 15 Small Business 8 Other 1 Taxes Done in 2010 Here 47 Another Free Place like This 10 My Own 11 Family or Friend 9 Did not file 10 Paid a Business 14 Where People Cash their Paycheck Grocery Store/Market 8 Payday Lender 2 Family/Friend cash it 1 Bank/Credit Union 38 Direct Deposit 47 Other 4 Plan on Buying with Tax Home 11 Car 26 Education 39 Small Business 4 Computer 19 24

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