Community Action agencies ask Legislature for $148,000 to expand VITA tax assistance statewide

Liz Sharp, director of community economic development and food security at Capstone Community Action, told the House Government Operations & Military Affairs Committee that the statewide Volunteer Income Tax Assistance program, known as VITA, helps Vermonters earning $67,000 or less and that she is asking the Legislature to increase state funding for the program.

"VITA stands for the Volunteer Income Tax Assistance Program," Sharp said. "We can file your taxes, at no charge." Sharp said VITA programs are based at every community action agency in Vermont and are run by program coordinators who recruit and train volunteers and set up remote sites across the state's mountainous regions.

Sharp said the treasurer's office funded the five community action agencies with $400,000 in the most recent allocation and that the agencies are requesting an additional $148,000 so each agency can fund a full-time coordinator year-round. "What we're asking for is to support the program coordinators who are there year round, helping folks, with their taxes," she said.

Sharp gave figures from the most recent filing season to illustrate the program's reach. She said volunteers filed just over 5,000 returns statewide in the 2024 fiscal year and that VITA activity returned $4,741,000 in tax refunds to Vermonters, including $2,679,000 in tax credits such as the earned income tax credit and child tax credit. Sharp told the committee Capstone alone handled about 1,200 returns with 29 volunteers and a coordinator, and that Capstone's per-return cost was about $105 last year; statewide, the treasurer-funded portion averaged about $79 per return.

Committee members asked how the program determines eligibility. Michael Morgan, a representative from Grand Isle (as identified in committee introductions), asked whether the program uses a specific poverty-line metric. Sharp replied that the $67,000 limit comes from IRS guidance for VITA eligibility and noted that that threshold can equate to different percentages of the federal poverty level depending on household size. "So for that program, 67,000 comes from the IRS," Sharp said.

Sharp also described nonfiling assistance VITA provides outside the February–April filing window, such as helping people file prior-year returns, respond to IRS letters, and resolve homestead or property tax adjustment questions. She said volunteers are IRS-certified and that returns typically go through a preparer, a reviewer and a submitter; she estimated a rejection rate of about 2 percent.

Sharp told the committee that the current VITA grants from the IRS are small and that IRS grant awards to each community action agency are partially a function of how many returns that agency files. She said full-time coordinators would increase capacity, which could increase both return volume and future grant awards.

No formal motion or vote occurred during Sharp's presentation. Committee members thanked Sharp and then moved to other agenda items.