For many Texans, their tax refund represents the largest single payment they receive all year and serves as an important part of their income. Last tax season, 2.6 million Texans claimed the Earned Income Tax Credit (EITC), a tax credit for working people with low to moderate income, earning back approximately $2,600 per filer.
The EITC is widely considered the most successful income supplement for working families. Research has found that the EITC not only improves a child’s current well-being, but also is associated with better health, more schooling, more hours worked, and higher earnings in adulthood. However, over 23 percent of EITC credits were left unclaimed in Texas in 2010, which means many Texans did not receive the refunds they worked for. These unclaimed credits amount to $1.9 billion in lost potential income or savings for these families.
Here are some available resources to help Texans claim and save their refund this tax season.
Free Tax Preparation Services
- VITA – The IRS’ Volunteer Income Tax Assistance (VITA) program offers free tax preparation services to individuals making up to $53,000 per year. Locate a VITA program through this website or by dialing 211.
- Free Online Tax Preparation Software – The following are three good online tax preparation options:
- myfreetaxes.com – For incomes of $60,000 or less in 2014.
- Benefit Bank Self Serve – For individual incomes of less than $65,000 and married couples with an income of $95,000 or less.
- TaxACT – No income restrictions.
Saving a Portion of a Tax Refund
Tax-time presents an important savings moment for individuals to save for a more secure future. A number of strategies and resources exist to encourage individuals to save a portion of their tax refund:
- 2015 Save Your Refund Promotion – SaveYourRefund, in its second year, is a nationwide, prize-based savings promotion that motivates and incentivizes consumers to save a portion of their refund by entering them to win cash prizes of up to $25,000. Learn more about Save Your Refund here.
- Consumer Finance Protection Bureau’s (CFPB) 2015 Materials. To order these free resources, including colorful table tents and posters, please send an email to empowerment@cfpb.gov, including the number of items you want and your mailing address.
- Other Resources to Help You Promote Tax-Time Saving
- CFED’s Taxpayer Opportunity Network 2015 Tax-Time Savings Webinar
- Learnings from the Field: Best Practices to Implementing a Tax-time Savings Promotion blog post
- OpportunityTexas’ Webinar recording and Slides: An overview of tax-time savings projects.
- OpportunityTexas’ Tax-Time Savings Project Resources
For more information, please contact Laura Rosen, Policy Analyst and OpportunityTexas Coordinator