Michigan CU League's "Just File It!" Program Helps Low-Income Consumers File Taxes for Free

EAST LANSING, Mich. – Reaching out to low-income individuals, the Michigan Credit Union League is launching a free, Web-based tax preparation service debuting this month. The program called, “Just file it! We’ll Help” and promoted as a tax preparation aid for those most in need, gives participating CUs the ability to provide refund anticipation loans to both members and non-members. “The Michigan credit union community, through its broad geographic and socioeconomic reach, can serve as an effective catalyst for low-income families and individuals to access much needed tax credits,” explained David Adams, president/CEO of the league. The “Just File It” package, which the league contends CUs can offer at no cost, has been in the planning stages for nearly two years and is an initiative advanced by the league’s Community Reinvestment Task Force. The project also has the endorsement of state regulators and the University of Michigan Poverty Law Program which has underwritten part of the costs. Jo Anne Fillwock, task force chairman and president/CEO of the $80 million Financial Health CU in East Lansing, said the service provides a way for low-income individuals, who ordinarily might pay high fees for tax preparation, to file forms for free at their local CU. So far, 60 CUs have signed up for the program. “We’re getting strong interest from our members,” said Lori Z. Bahnmller, league vice president. Fillwock said “Just File It” is not meant to be a moneymaker but does demonstrate anew the industry’s broad social mission. “Too often we who manage credit unions are unable to clearly define, measure and demonstrate exactly how we serve the low-income sector,” said Fillwock. Both Congress as well as state lawmakers “hear the anecdotal stories we tell” but compiled statistics and documentation to back up CU performance are not always available, she said. Financial Health expects to start “Just File It” at three of its four branches including one in a low-income area of East Lansing, said Fillwock. Under the program, tax filers using the league service and completing both state and federal income tax returns, could save substantial money. Combined with loan charges, a tax filer could pay as much as $350 to H&R Block, she said, acknowledging that the nationwide tax firm “might not like the service we offer” but does understand CU goals in helping low income. As part of “Just File It” being offered to Financial Plus members, Fillwock said the CU is requesting filers seeking refund anticipation loans put 10% of the refund into CDs. “We hope this will help encourage savings,” she said. Adams noted the league has invested in the Web-based software and all CUs need is Internet access and a printer to participate – there is no cost to the credit union. Adams pointed out that “more than $200 million in federal tax refunds and credits go unclaimed in Michigan annually by the people who need it most-low-income families and individuals.” The league noted that helping low-income taxpayers was the topic of a Nov. 10 NCUA mailing to state leagues encouraging free tax preparation in conjunction with the IRS. “More than 130 credit unions across the country provided various services to assist low income families during the 2005 filing season making a difference in their communities and the lives of others,” wrote NCUA Chairman JoAnn Johnson. The Michigan League noted that Johnson was focusing on the federal earned income tax credits “but our program will also give low-income tax filers access to state income tax credits that could as much double their EITC refund.” In a separate fact sheet, the league also reiterated the point that many CUs are already involved in assisting low-income filers in accessing the EITC mostly through local community partnerships with the IRS, United Way and others. In outlining program details, the league said participating CUs agree to host one or more “Just File It” on-premise sites, which are Internet-ready with computer access and the printer. “Many credit unions already have computers available in lobbies for members to access home banking,” said the league. Thus, “one or more of those could be isolated for “Just File It.” “The only cost to the credit union is for printing,” the league concluded. As for using CU staff, the league said the program is intended to be self-serve “and such is written at a fifth-grade reading level and includes video tutorials.” Credit unions starting the program may choose to have a staff member oversee the filer site to assist individuals with membership-related questions, such as opening an account for direct deposit of the refund, and/or asset building ideas such as CDs. Apart from the U of Michigan Poverty Law Program and Linda Waters, commissioner of the Michigan Office of Financial Institutions, the League identified the administration of Gov. Jennifer Granholm as a backer of the program as well as these groups: Michigan State University Extension, Michigan Department of Health & Human Services, Michigan Works! Michigan Family Independence Agency and the Michigan Department of Treasury. [email protected]