Citi Teams up with Cities across the U.S. At Tax Time
By Bill Mills, CEO North America and Bob Annibale, Global Director of Citi Community Development and Inclusive Finance January 26, 2018 10:00 AM
Nearly half of all U.S. households lack the savings to cover a $400 emergency expense. But at the same time every year, an all- too-often unrecognized opportunity arises that has the potential to alleviate this persistent financial vulnerability for working families living on lower incomes: Filing taxes.
Tax season offers a vital financial lifeline to millions of working Americans, thanks to one of the nation’s most successful anti-poverty programs – the Federal Earned Income Tax Credit (EITC).
The Earned Income Tax Credit is available to those earning less than $54,000. 26 million taxpayers claimed the EITC in 2017, receiving an average return of $2470 per household -- a total of over $63 billion. This is often the largest cash infusion many working lower-income families receive all year. And they put this money to good use, from paying down debt to building savings, financing educational studies or purchasing goods and services from local businesses.
At Citi, we want to ensure that financially vulnerable families derive the maximum benefit from this vital credit, including not having to pay hundreds of dollars to pay professional preparers to file their taxes. That’s why today, on National Earned Income Tax Credit Awareness Day, Citi Community Development is announcing a $2.6 million investment to support free tax preparation services in major cities and regions across the country. As part of our mission to enable economic growth and progress, Citi is supporting municipal efforts to expand awareness, access and capacity of Volunteer Income Tax Assistance (VITA) sites during the 2018 tax season.
Citi's investments are supporting the establishment or significant expansion of EITC Awareness campaigns in 12 cities and regions across the country, including: New York City and Long Island, New York; Newark, New Jersey; Miami-Dade County, Florida; the Bay Area Region; Fresno, Orange County, San Diego, Sacramento and Los Angeles in California; South Dakota; and Washington, DC. Over the next three months, many of these cities will be prominently promoting free tax preparation and EITC filing with multi-lingual ads on bus shelters, billboards, mass transit lines, and on radio, television and social media to get the word out.
Some states, like California, have also introduced a similar state-level EITC plan, which can return additional state taxes to working families. In the Bay Area, the cities of Oakland, San Francisco, and San Jose will lead an EITC awareness campaign and tax preparation network, which is the first time these three local governments and Citi have worked to create a regional information, outreach and communications strategy and materials. In Los Angeles, Citi is collaborating with the City of Los Angeles, California State University Northridge and the Department of Veteran Affairs to support greater EITC uptake among veterans and military families through an innovative peer-to-peer approach where experienced tax preparers will be recruited from the military community.
Citi’s support across the country builds off of three years of investments and pilots aimed at expanding access to the EITC, most notably in New York City.
Since 2015, we have collaborated with the City of New York as the sole corporate partner in their public education and outreach tax credit campaigns. In its first year, the city’s network of VITA sites more than tripled to nearly 200 locations citywide and successfully raised the number of people utilizing VITA sites from 96,000 to 150,000 people, which meant the city could return $250 million in savings and refunds to low-income New York families.
And this year, we launched a new partnership with the City of New York to increase the number of residents accessing free tax preparation. Citi volunteers are donating valuable financial skills and knowledge to serve as tax preparers at VITA sites across all five boroughs.
During the 2018 tax season, Citi’s investment seeks to support the completion of over 230,000 tax returns through a variety of programs, and to return approximately $191 million in refunds, while informing many more of this important program.
The EITC is more than just an economic asset. For financially vulnerable residents of the cities where we live and work, this simple tax credit changes lives. This year at tax time, our investments are boosting economic progress by helping to ensure that more families than ever before have the tools they need to become financially resilient.