Report
218
Number
Aug 17 2010

Free and For-Pay Tax Preparation Programs at Two Credit Unions: SECU and UW Credit Union

Want to help members? Here’s one more simple way. Tax assistance programs are becoming an increasingly popular option for credit unions to offer to their members and the communities they serve. Financially beneficial services such as these are a vital part of our economic recovery.

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Both free and low-cost tax preparation programs are a great way to educate taxpayers about the credits they can receive, enable them to obtain these credits in the quickest possible manner, and influence their decisions about use of their refunds.

And for credit unions, it can lead to a direct increase in savings and checking account deposits and creation, benefit enrollments, and an overall awareness of credit union services. This can further influence potential members in a credit union’s field of service.

State Employees Credit Union (SECU) and UW Credit Union both provide excellent examples of credit unions getting involved in tax assistance programs that provide benefit to the communities in which they reside. SECU is a North Carolina based credit union that currently has 232 branches and 4,200 employees. The credit union has had substantial success in providing free tax preparation through the IRS sponsored VITA program (Volunteer Income Tax Assistance). Its program has been in operation for three years, and in 2010 alone completed over 36,000 returns, helping low- and moderate- income individuals claim more than $49 million in tax refunds and save over $5.3 million in tax preparation fees. In addition, SECU prepared nearly 2,200 returns at a low-cost for members whose incomes were above the VITA income threshold limit of $49,000. The credit union trains a minimum of two employees in each of its branches to be volunteer tax preparers.

UW Credit Union is based in Wisconsin and currently has 13 branches and 142,000 members. In 2010 the credit union teamed up with a non-profit, Progress Through Business, to offer VITA. Together they completed 276 returns, providing an estimated $138,000 in value to the low-income community. More than 85% of these returns were completed within UW Credit Union’s corporate office as well as two satellite offices. UW Credit Union and Progress Through Business primarily rely on their college connections for volunteers rather than focusing on employee training. Overall, SECU and UW Credit Union take two different approaches towards providing tax assistance programs, both of which can serve as good models for community economic development.

Review a Webinar with the researchers and other credit union participants:

Tax Prep Webinar from Josey Siegenthaler on Vimeo.

Report Number 218