UA, Impact Alabama Students Providing Free Tax Prep Services for Working Families

TUSCALOOSA, Ala. – More than 100 students from The University of Alabama Center for Ethics & Social Responsibility and Impact Alabama are providing free tax preparation services to working families.

Locally, the free tax clinic will be offered through Feb. 26 at sites in Tuscaloosa and Holt.

The schedule includes:

Tuscaloosa site: Tuscaloosa Housing Authority (Rosedale Court), 2808 10th Ave. Tuscaloosa, AL 35401

Hours: Monday-Thursday, noon – 8 p.m.

Friday, noon – 6 p.m.

Saturday, 9 a.m. – 3 p.m.

Holt site: Holten Heights Church of the Nazarene, 4401 17th St. NE Holt, AL 35404

Hours: Monday, noon – 8 p.m.

Thursday, noon – 8 p.m.

Saturday, 9 a.m. – 3 p.m.

Those interested should call 1-888-99-TAX-AL to schedule an appointment.

This year, families can enter the SaveNow WinLater Sweepstakes for a chance to win a $20,000 grand prize jackpot by investing in savings bonds.  For every $50 eligible families invest in a federal savings bond they will earn a chance to win a $20,000 grand prize jackpot at the end of tax season. A smaller prize will also be awarded March 8.

UA students working under the supervision of SaveFirst, a nonprofit tax preparation and financial literacy initiative of Impact Alabama, will provide free income tax preparation services to working families making less than $50,000 a year with children in the home or $20,000 a year without children in the home.

The service is designed to assist families who are eligible for the Earned Income Tax Credit – a federal program for low-income, working families.

Each year, about 78 percent of Tuscaloosa’s EITC recipients pay an average of $250 to access this benefit, tax clinic organizers say, often by taking out predatory refund application loans (“rapid refunds”) on their expected refund with annual interest rates of up to 800 percent. Some 8,900 families in Tuscaloosa claimed an estimated $20.3 million through the federal EITC in 2006. However, clinic organizers say the families lost millions to commercial tax preparers through fees and refund anticipation loan costs.

SaveNow WinLater, a national prize-linked savings opportunity, is a partnership with Doorways to Dreams, headed by Harvard University economist Peter Tufano.  D2D’s similar prize-linked savings initiative based in Michigan, Save to Win, was successful in 2009 when more than 11,500 Michigan residents opened accounts and saved $8.5 million.

Impact Alabama’s Save First initiative is in its fifth year of operation. Last year, more than 500 trained students from more than 10 campuses prepared tax returns for more than 3,200 families in cities statewide.  In just six weeks, the statewide campus collaboration helped these working families secure more than $6.8 million in tax refunds, saving them more than $1 million in commercial tax preparation fees.