Mar 23 2009

The Economics of Serving Low-Income Employees at Tax Time

Report  
Number  
179

In this research study we examine the nexus of tax preparation services, an office supply giant, and nonprofit organizations.

John Hoffmire, PhD
Director of the Center on Business and Poverty
University of Wisconsin-Madison
Tom Harms
Progress Through Business
Report Number 179

Executive Summary

The Economics of Serving Low-Income Employees at Tax Time: Implications for Credit Unions, explores a partnership between Progress Through Business, a nonprofit organization focused on poverty alleviation issues, and H&R Block to offer tax preparation to low-income employees of Staples, Inc. The report shows how tax preparation services, corporations and nonprofit organizations can work together in the process.

What is the research about?

In this research study we examine the nexus of tax preparation services, an office supply giant, and nonprofit organizations. Over the past several years, Progress Through Business, a nonprofit organization focused on poverty alleviation issues, partnered with H&R Block to offer discounted tax preparation to low-income employees of Staples, Inc., through a pilot program called Tax Break. What made Tax Break unique was the inclusion of opportunities for enrollment in both public and private benefits programs in the tax preparation process.

What are the credit union implications?

It is important to note that this report examines something very different from what many credit unions may be used to in the tax preparation field. In short, we are not reporting on a modest tweak to the mainstream Volunteer Income Tax Assistance (VITA) programs. This study is about providing tax preparation and public/private benefits enrollment to low- and modest-income employee groups for a fee. Previous work by the Filene Research Institute confirmed the efficacy of “at-work” financial service programs, and according to this report, replicating aspects of the Staples program at credit unions could have “dramatic” implications.

As credit unions continue to seek out creative ways to better serve all segments of the population, this study may offer unique tactics.

This report is sponsored by the National Credit Union Foundation and its Signature program, REAL Solutions.