Helps Low-Income Residents Build Finances
Mayor Michael R. Bloomberg, Department of Consumer Affairs (DCA) Commissioner Jonathan Mintz and Center for Economic Opportunity Executive Director Veronica White announced in Corona on Monday, Jan. 30, the results of the first year of SaveUSA, a multi-city program that encourages lowincome residents to build savings.
In its first year, participating residents of the four cities opened more than 1,600 SaveUSA accounts with close to $1 million in savings. In New York City, residents with an average income of $16,000 were able to build up $250,000 in savings. Eligible participants receive a 50 percent match if they deposit at least $200 of their tax refund into a SaveUSA account and maintain the deposit for one year.
The program, which is based on the city’s successful tax-time savings program, $aveNYC, was expanded last year to three cities: Newark, San Antonio, and Tulsa. The matching funds are provided through a federal Social Innovation Fund grant awarded to the Mayor’s Fund to Advance New York City and the Center for Economic Opportunity.
The mayor made the announcement at one of the city’s 69 Volunteer Income Tax Assistance sites, located at the Transfiguration of Christ Church in Corona. He was also joined by FoodBank For New York City President and CEO Margaret Purvis and City Council Member Julissa Ferreras.
“Filing your taxes can mean money back in your pocket, money that can be used to pay bills, spend in your community, or cover an unexpected expense,” said Bloomberg. “It can also mean the opportunity to start saving for a growing family or higher education. SaveUSA is a prime example of how our Center for Economic Opportunity is breaking new ground when it comes to fighting poverty. We encourage all New Yorkers who are eligible to sign up for a SaveUSA account at a participating free tax site.”
“Hundreds of thousands of New Yorkers qualify for the Earned Income Tax Credit and thanks to our Citywide EITC Coalition, eligible New Yorkers have collected nearly $20 billion in tax credit refunds since 2002. These dollars not only benefit New York families, but also our local economy,” said Mintz. “I encourage New Yorkers to go get every dollar of their refund by filing for free online, at one of the city’s 69 different free tax sites across the five boroughs, or with the city’s coupon at H&R Block locations for only $29 throughout the entire tax season; and I also encourage New Yorkers to save some of their refund to qualify for a 50 percent match through the SaveUSA program. Contact 311, visit nyc.gov, or watch our YouTube Tax Time video for more information.”
“This creative and expanding program to SaveUSA accounts is a success that will help to build better futures and increase opportunities for those who participate and their families,” said Queens Borough President Helen Marshall. “Here in Queens, my hope is that this SaveUSA site will be a very active one that attracts more applicants looking for an easier and simpler way to build a little nest egg for unexpected expenses and future plans..”
“Providing free tax preparation programs at VITA sites like the Transfiguration of Christ Greek Orthodox Church through the Food Bank for New York City is essential for many New Yorkers in this economy, especially those in my district,” said Ferreras. “SaveUSA is wonderful and much-needed program because it gives individuals who need it the most the chance to build wealth and improve their financial circumstances.”
SaveUSA
New Yorkers visiting select Volunteer Income Tax Assistance (VITA) sites have the opportunity to participate in the SaveUSA program. If selected, participants could receive a 50 percent match, up to $500, if they deposit at least $200 of their tax refund into a SaveUSA account and maintain the initial deposit for one year. In 2011, almost 2,500 filers across the four cities participated in the SaveUSA study, opening more than 1,600 accounts.
Approximately 75 percent of account holders received the match funds on Wednesday, Feb. 1. These account holders are on track to have almost $1 million in total savings, which includes initial savings amounts plus matching funds.
Funded through a Social Innova- tion Fund grant awarded to the Mayor’s Fund to Advance New York City and the NYC Center for Economic Opportunity, this national replication is being offered to eligible tax filers in New York City, Newark, N.J., San Antonio, T.X., and Tulsa, Okla. In New York City, SaveUSA is implemented by the Food Bank for New York City and Ariva, in partnership with Capital One Bank, CheckSpring Bank, and Carver Federal Savings Bank.
Additional support for the New York City program is provided by the Ford Foundation, Bloomberg Philanthropies, Open Society Foundations, The Rockefeller Foundation, and the Annie E. Casey Foundation. In total, five New York City programs are being replicated in New York and seven cities across the country through the Social Innovation Fund initiative.
SaveUSA is a large-scale study of matched, tax-time savings, and will use the rigorous random assignment evaluation method. Interested tax filers will be randomly assigned to be part of either a SaveUSA group, eligible to open a SaveUSA account, or a comparison group, not eligible for the account. MDRC, a nonpartisan education and social policy research organization, will study and compare the two groups over time to determine whether, and to what extent, SaveUSA produces changes in people’s overall financial wellbeing.
The SaveUSA program is based on the success of the $aveNYC program, led by the Department of Consumer Affairs from 2008-2010. The program sold out available accounts, attracting approximately 2,200 New Yorkers in its three years of initial operation. Participants living in some of New York’s poorest neighborhoods pledged more than $1.4 million in savings.
The majority of participants-80 percent-saved for the year and received the match funds, accumulating over $1.7 million. Seventy percent of these account holders continued to save even after receiving the match.
Free or low-cost tax preparation
The city also launched the 10th Annual Tax Credit Campaign. Since 2002, the City of New York has promoted the Earned Income Tax Credit (EITC) and encouraged New Yorkers to file their taxes for free or at low cost by contacting 311 or visiting nyc.gov.
Since its inception, the Mayor’s EITC Campaign has helped New Yorkers claim almost $20 billion in Federal, State and City refunds, including $1 billion directly through the city’s network of free and low cost sites.
The city’s Annual Tax Credit Campaign increases awareness about tax credits that can put money back in the pockets of working New Yorkers, and will help qualifying New Yorkers file their taxes online for free or low cost. New Yorkers eligible to receive the EITC could receive up to $7,600 and working families with children three years old and younger could be eligible for up to $1,733 with the New York City Child Care Tax Credit (NYC CCTC). The NYC CCTC assists families with low incomes or who are underemployed with the cost of child care for children.
New Yorkers with children who earn less than $50,000 or $18,000 for those who do not have children can visit one of 69 Volunteer Income Tax Assistance (VITA) sites in the five boroughs where a certified volunteer will prepare their taxes for free.
Those earning less than $57,000 can also file their taxes online for free through the city’s free tax-prep website on www.nyc.gov. The city is partnering with Intuit Inc. and One Economy Corporation to offer online free tax preparation.
New York City’s Tax Credit Campaign is spearheaded by the Department of Consumer Affairs (DCA) and its Office of Financial Empowerment (OFE) and supported in part by donations made to the Mayor’s Fund to Advance New York City. Hundreds of participating organizations partner with the City to raise awareness about the Campaign and deliver tax preparation services. Partnerships with New York City’s Human Resources Administration, Housing Authority, Department of Homeless Services, and the Department of Information Technology & Telecommunications help promote the Campaign.
The Department of Finance is also continuing its innovative EITC program launched back in 2007. Within the next few weeks, the State will send checks to New Yorkers who qualified for the State and City EITCs in 2008, but have not claimed them. The Finance Department will mail more than 5,500 amended tax returns to New Yorkers who didn’t claim the Federal EITC in 2008. In total, these efforts will return about $4.5 million to New Yorkers.
For more information, visit www.nyc.gov/dca.
