Over the past two weeks, the nonprofit group Tax Help Colorado has been on the receiving end of panicked emails and calls from low-income people worried about how to file a tax return so they can get their federal stimulus payments, which can amount to as much as $1,200 per person.
Normally, Tax Help Colorado would direct callers to one of 40 free tax-preparing sites across the state, part of a national IRS volunteer program—but those shut down in mid-March amid the rising CCP virus crisis.
That's where Code for America comes in.
Long before the outbreak, the group—also a nonprofit—started building a secure way for people to upload their tax documents with an online service called Get Your Refund, and still get help from a volunteer tax preparer. It's aimed at helping low-income people, millions of whom don't file each year, claim tax credits they're due.
It fully launched just days before the IRS volunteer sites shut down, quickly becoming the only way the volunteer tax preparers could keep working. Now when people call Tax Help Colorado, director Courtney O'Reilly can direct them to the Get Your Refund site.
Once all their documents are uploaded and verified, she partners them with one of the volunteer tax preparers.
"The urgency in the phone calls really struck me," O'Reilly said. "During a traditional tax season, they're looking for assistance but it's a little less panicked. Now, it's 'What can I do? I'll do anything.'"
Code for America expected to help process about 5,000 tax returns this year, partnering with Tax Help Colorado and three other providers through the IRS Volunteer Income Tax Assistance program. But now that's ballooned to 40 different groups, and Code for America may end up processing as many as 50,000 returns this year, said Lou Moore, interim co-CEO and chief technology officer.
Scaling Up FastInitially, the service was meant to help people in rural communities who may not have a tax preparer site nearby, or anyone whose work hours would prevent them from being able to get assistance in person.
The group is especially focused on reaching people who aren't required to file tax returns because they don't earn enough money—but are eligible for a child tax credit or the Earned Income Tax Credit and would end up receiving a refund if they do file. About 20 percent of families who are eligible for the income tax credit don't claim it.
Research shows that even when people are aware of those credits, they still may not file. It can be challenging for someone to tackle a tax form, especially when they haven't done so in years, and it can also be hard to know which tax preparation services are both free and trustworthy.
The passage of the $2.2 trillion federal stimulus program in late March gives those families even more of an incentive to file. The federal program aims to get money directly into the hands of about 90 percent of Americans as quickly as possible as they deal with the financial fallout of the coronavirus pandemic.
New Online ToolsOn Friday, the IRS revised guidance and launched a new online tool to help low-income people who aren't normally required to file returns to input some basic information so that they can receive the stimulus money. They'll have to provide their Social Security number, name, address, and the number of their dependents, as well as bank account information if they want to receive a direct deposit.
It won't resolve every challenge for non-filers, like those who don't have Internet access, but it should be easier than filing a full return.
Code for America is now working to integrate that tool with its own service.
O'Reilly was at first unsure if her volunteers would be willing to help out from home during the pandemic, but says she was overwhelmed by the positive response. They have about 25 volunteers working remotely and more standing by if needed.
"I think right now, people want to help other people," she said.
Next week, the IRS is planning to roll out a web portal that will give people whose bank account information is not on file with the agency the ability to submit it in order to get their stimulus payments faster, without waiting for paper checks.