EITC Carolinas

January, 2008

Five years ago, MDC, Inc. started the EITC Carolinas Initiative as an outgrowth of its Program for the Rural Carolinas.  Local coalitions in eight rural counties in both North and South Carolina saw a need to promote the EITC and to educate tax filers about the high cost of Refund Anticipation Loans because of the extremely high rates of RAL use in rural towns.  During the first year of the initiative, three groups focused on EITC outreach only and five did both outreach and free tax preparation.  Between these groups, they completed 350 tax returns that first year.

At that time, the Annie E. Casey Foundation was very interested in increasing their rural EITC work.  They saw EITC Carolinas as an opportunity to reach rural communities, and asked MDC to design a model to serve as a statewide intermediary for rural campaigns.  Rather than preparing tax returns themselves, EITC Carolinas provides assistance to rural, as well as urban, EITC outreach campaigns and free tax preparation programs in both North and South Carolina.  EITC Carolinas has grown from a partnership between eight groups to include partnerships with about 35 local campaigns, each with its own coalition of local organizations, throughout North and South Carolina.  The coalitions that partner with EITC Carolinas completed over 14,000 returns last year, and expect to complete even more this year. 

In support of these EITC campaigns, EITC Carolinas provides two EITC training events each year, as well as on-site training and technical assistance to their partner organizations.  Each year, they make between $30,000 and $50,000 in pass-through grants available to their local partners.  They have brokered agreements with financial institution to provide reasonably-priced products at tax sites.  They have produced publications on starting a VITA site, using credit reports, and linking clients to asset building opportunities.  Their website has information for local VITA campaigns, as well as tax filers, the press and public officials, and employers.  They also help fund a statewide EITC information helpline through Connectinc.  Every other year, they partner with other organizations to hold the North Carolina Financial Education and Asset Building Conference which drew close to 400 participants this year.

One of the most exciting programs that EITC Carolinas helped to initiate is the North Carolina Asset Building Policy Tax Force.  Launched with the co-sponsorship of the IDA and Asset Building Collaborative, the Task Force now includes over thirty organizations in North Carolina to advocate for the improvement of the state’s asset building policy.  Many of the organizations involved were also key players in the successful fight to enact a state EITC in North Carolina.  The task force has 16 priority areas, but one big focus is increasing the state EITC, which is currently 3.5 percent of the federal EITC.  Other priorities include removing asset limits from public benefits program, starting a Children’s Savings Account program, increasing the size of the state housing trust fund, and issues related to healthcare, education, & training.  The Task Force has also spawned an exciting new collaboration between the asset building and disability communities across the state.  EITC Carolinas believes that improving the state’s asset building policy holds great promise for improving the lives of the rural poor in North Carolina.

Lucy Gorham, the Director of EITC Carolinas, feels that the working poor in rural North Carolina have special needs.  They face high rates of job loss and unemployment, increasing health care costs, challenges with affordable transportation and childcare, and low wages.  Furthermore, it is more difficult to get the word out about the EITC and other tax credits in rural communities.  For example, while in cities you can put fliers and signs in subways and busses, in rural areas it is more difficult to reach people who are spread out over a large geographic area and have fewer public spaces.   Programs rely much more on word of mouth to get the word out.  However, rural programs can run on a smaller budget than their urban counterparts, so even a small grant or donation can make a big difference to a rural VITA program.  One of the great successes of EITC Carolinas is their ability to help a large number of rural programs to reach clients in sparsely populated areas, and teach them about the tax credits they are eligible to receive – credits that can make a big difference for these rural families.

Story by Judy Wemhoff and Lucy Gorham