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Volume 13, Issue 1, 2013   Federal Reserve Bank of Dallas

Savings Programs Associated with VITA

There are thousands of Volunteer Income Tax Assistance (VITA) sites across the country and more than 250 in Texas.[1] Located at libraries, community colleges, churches and community-based organizations, these sites pop up during tax season in areas accessible to low- and moderate-income (LMI) workers.

VITA sites can connect LMI families not just to the Earned Income Tax Credit (EITC) but to other tax credits they may be eligible for, such as the Child Tax Credit, education tax credits and the Credit for the Elderly or the Disabled.

In addition to basic tax filing, many VITA sites run by local nonprofits offer financial or credit counseling and services that include opening savings accounts, purchasing savings bonds with tax refunds and creating individual development accounts (IDAs).

In 2012, more than 114,000 Texans filed their taxes through VITA sites and received $85 million in EITC refunds. Of those receiving the EITC, over 1,800 participated in savings programs offered through certain VITA sites, choosing to place a portion of their EITC funds in Series I Savings Bonds, stored-value cards, IDAs or basic savings accounts.[2] For these households, VITA sites can be a gateway to the financial mainstream.

Given that VITA sites are free of charge and can provide substantial financial benefit, it would seem that they would be very popular with LMI families. However, approximately 63 percent of Texans who receive the EITC file through paid preparers. The use of VITA sites by EITC recipients differs by county but averages just over 2 percent across Texas (Figure 1).

The major misperception is that getting the refund is faster at a paid preparer. The lack of knowledge about VITA locations or services can be another contributing factor to these low take-up rates. Most VITA sites file electronically, so clients can receive their refunds just as fast as with a paid preparer. Increasing awareness of services and savings products offered may lead to increased use of these sites and, therefore, higher levels of asset-building for LMI workers.

To find free tax-preparation and other asset-building programs in Texas, visit the RAISE Texas resources web pageoff-site.

The following are the largest active savings projects in Texas this tax season:

  • United Way of Greater Houston SAVE: By partnering with Neighborhood Tax Centers and Promise Credit Union, SAVE offers a matched-savings program at 15 VITA sites in the Houston area. In tax season 2013, filers can open a Promise Credit Union savings account with their refunds, depositing up to $1,000. If this account is maintained until Jan. 15, 2014, clients will receive a 25 percent match on the deposit. The goal of this asset-building program is to open at least 500 such accounts this filing season. For more information, see United Way Houstonoff-site and Neighborhood Tax Centersoff-site.
  • SaveUSA San Antonio: United Way offices in San Antonio and Bexar County run a matched-savings program at five of San Antonio’s 23 VITA sites. These sites offer a 50 percent match for clients who deposit at least $200 of their tax refund into a savings account and maintain the balance for a year. Last tax season, 76 percent of the initial 436 SaveUSA San Antonio accounts maintained their balances for a full year, resulting in an average final savings amount of $937. More informationoff-site
  • Opportunity Texas: This joint initiative between the Center for Public Policy Priorities (CPPP) and RAISE Texas offers two tax-time savings programs through partnerships in 12 Texas communities. One program is the Savings Bond Incentive Project. This model offers incentives for purchasing a Series I Savings Bond on the tax form.[3] When filers receive a tax refund and purchase at least $100 in savings bonds, they also receive a $25 gift card to a grocery or retail store. The other savings program, the Opportunity Savings Project—operated in partnership with the Texas Credit Union Foundation—provides an Opportunity Account, a matched-savings account similar to those offered by SaveUSA. For participants whose balances grow, the Opportunity Texas project will provide a dollar-for-dollar match on the increase, up to $100.

“We think both up-front and delayed savings incentives are important, serving different purposes,” said Laura Rosen, Opportunity Texas coordinator. She explained how the savings incentives are structured in the tax-time savings projects: “The savings match delivered at the end of the year encourages participants to grow their savings throughout the year, while the gift card given for sign-up boosts filer participation. It’s easier for people to decide to save for the future when they have an incentive that allows them to also meet their basic needs today.”

For more information, see the CPPP's "Savings Soars: OpportunityTexas' Tax-Time Savings Project Triples Impact from Last Year"off-site and "Dollar for Dollar: Incentives and Innovations to Boost Savings in Texas"off-site.

The presentation of the Opportunity Texas-sponsored webinar on strategies and best practices to encourage the growth of VITA client savings is available online at www.opportunitytexas.orgoff-site.

In addition to the Texas programs, the Doorways to Dreams Fund has created a national SaveYourRefund sweepstakes through which participants may win $250 or a grand prize of $25,000. Eligibility requirements are created with asset-building goals in mind: Filers can enter only when they save at least $50 of their refund using IRS Form 8888, which directs portions of tax refunds into either direct-deposit or savings bond purchases. More information on the program and how to enter can be found at www.saveyourrefund.comoff-site.

—Wenhua Di and Emily Ryder


  1. “Community Tax Centers/VITA,”off-site RAISE Texas.
  2. “Dollar for Dollar: Incentives and Innovations to Boost Savings in Texas,”off-site Center for Public Policy Priorities, October 2012.
  3. “I Savings Bonds,”off-site TreasuryDirect.

e-Perspectives, Volume 13, Issue 1, 2013

Federal Reserve Bank of Dallas Off-site page
Community Development Office Send an e-mail
P.O. Box 655906, Dallas, Texas 75265-5906
Alfreda B. Norman Send an e-mail
Vice President and Community Development Officer
  Jordana BartonSend an e-mail
Senior Community Development Advisor
Wenhua Di Send an e-mail
Senior Economist, Community Development
  Julie Gunter Send an e-mail
Senior Community Development Advisor
Jackie Hoyer Send an e-mail
Senior Community Development Advisor, Houston Branch
  Emily Ryder Send an e-mail
Community Development Analyst
Elizabeth Sobel Blum  Send an e-mail
Senior Community Development Research Associate
The views expressed are the authors' and should not be attributed to the Federal Reserve Bank of Dallas or the Federal Reserve System. Articles may be reprinted on the condition that the source is credited and a copy is provided to the Community Development Office.
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