RALEIGH, N.C. — Two credit unions in North Carolina have teamed up with the Internal Revenue Service to sharply increase its effort two help lower income North Carolinians take advantage of tax benefits meant to help low-income people.
The Volunteer Income Tax Assistance program helps low-income people fill out their tax forms and take advantage of the tax benefits that the law provides. The $14.7 billion State Employees' Credit Union and the $708 million Local Employees Federal Credit Union, both headquartered in Raleigh, estimate that 400,000 of their members are eligible for the help.
Josh Kelly, vice president of Financial Advisory Services for SECU stated, "Many North Carolinians are unaware they qualify for free income tax preparation through VITA and subsequently pay for tax preparation."
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He also reported that SECU has found many of its members obtain refund anticipation loans with extremely high interest rates targeted at low-income taxpayers.
"These refund anticipation loans make little sense, since the IRS typically delivers refunds in 7-13 days. Tax filing abuse is becoming a nationwide epidemic and SECU is positioning itself to combat this abuse, leaving more money in the pockets of North Carolinians," he added.
The effort is not insignificant. Between now and next year's tax season, which the credit union believes will peak for its lower income members in February, the credit unions have committed to train two staff members for each of its branches in the tax preparation procedures. For SECU alone that means at least 430 staff members will have to complete, on average, 46 hours of training in the procedures and in the tax preparation software.
But if the investment is significant the reward is as well. David King, chairman of SECU's board estimated that North Carolinians are currently leaving over $150 million in Earned Income Tax Credit funds to which they would otherwise be due because they don't know about them.
We're looking forward to helping over 400,000 credit union members and the citizens of North Carolina get the money they deserve," King said, calling it "a positive result of hands-on financial literacy and a possible $150 million boost in North Carolina's economy."
Maurice Smith, president/CEO of Local Government Federal Credit Union, said his CU was pleased to join the effort.
"LGFCU is pleased to partner with SECU and the IRS to provide this much needed service to North Carolinians. The extensive statewide branch network gives us the ability to reach many of our State's citizens with these free services–citizens who would otherwise be forced to pay excessive fees. Collectively, we feel this is the right thing to do and an initiative that can make a huge financial difference in North Carolina," he said.
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