Prepare and Prosper advocates for funding Minnesota Taxpayer Assistance and Outreach grants

The Minnesota Legislature's Committee on Taxes convened on April 8, 2025, to discuss critical funding for taxpayer assistance programs and proposed legislative changes. The meeting focused on two main agenda items: Senate File 2581, which pertains to funding for tax assistance grants, and Senate File 2580, which addresses corrections for Individual Retirement Account (IRA) contributions.

The first item discussed was Senate File 2581, which seeks to secure $2 million annually for assistance grants and tax credit outreach. Alejandro Valenzuela, representing Prepare and Prosper, emphasized the importance of continued funding for Volunteer Income Tax Assistance (VITA) programs across Minnesota. He highlighted that these programs serve over 50,000 taxpayers annually, returning more than $100 million in tax refunds to low-income individuals and families. Valenzuela noted that the funding is crucial due to uncertainties surrounding federal support for VITA programs. He shared a poignant example of a taxpayer who, after not filing for two years, was able to claim significant refunds thanks to the outreach efforts supported by these grants.

Michelle Jensen, the tax program manager at United Community Action Partnership (UCAP), also provided testimony in support of Senate File 2581. She detailed UCAP's expansion of services in Southwest Minnesota, which included adding new tax sites and hiring additional staff to meet the growing demand for free tax preparation services. Jensen reported that UCAP served over 2,700 low-income households last year, returning more than $6 million in tax refunds. She stressed the importance of these services in helping families manage basic needs, especially as costs for essentials rise.

Following the discussions on Senate File 2581, the committee moved on to Senate File 2580. This bill aims to clarify the process for taxpayers wishing to correct the year in which their IRA contributions are counted. The proposed legislation addresses issues faced by taxpayers when attempting to make corrections on their returns, ensuring compliance with federal law.

The committee concluded the meeting by laying over Senate File 2581 for further consideration, while Senate File 2580 was also discussed but not voted on. The discussions underscored the vital role of tax assistance programs in supporting Minnesota's low-income communities and the ongoing legislative efforts to enhance these services.