Kathe Fredette remembers the story of a pair of sisters who lived together and had a combined low income. One was disabled, one working, and they came to a VITA volunteer tax assistance site.
“They didn’t realize they could claim certain tax credits,” Fredette recalled. She helped the women, and was able to get them $11,000. The Farmington women were fine with it, until one of them looked at Fredette and asked, “Are you sure the government doesn’t need this money?”
Fredette assured them it didn’t.
Fredette, tax site coordinator for Rockingham Community Action, has been assuring people of that for 30 years as she helps low- and moderate-income people get the returns they deserve, most recently through VITA (Volunteer Income Tax Assistance) at the Rockingham Community Action Center in Derry. She will be holding office hours on April 10 to help area residents get back some of their hard-earned cash.
Fredette said Community Action is the lead entity for the CASH (Creating Assets, Savings and Hope) Coalition, a program that helps people discover and use their “financial capability.” She started out working in the private sector and then joined the University of New Hampshire Cooperative Extension, working out of Durham to help Granite Staters manage and maximize their money.
People don’t know they are eligible for credits and larger refunds, Fredette observed.
The CASH Coalition is a good match for Community Action, which helps people utilize their resources to get back on their feet, she said. “In some cases they may never not rely on some form of assistance, but we help them utilize their resources the best they can,” she said.
VITA and TCE (Tax Counseling for the Elderly) are the two programs authorized by the Internal Revenue Service to help low- and moderate-income taxpayers, Fredette said. While TCE has no income limit, VITA has a pre-filing income limit of under $60,000.
She started administering the programs through Community Action and began offering the program in Derry in 2010. The program is also offered on the Seacoast, covering an area from Portsmouth to Farmington. The program is offered in space borrowed from the Northeast Credit Union in Portsmouth and in the Community Action Centers of Derry, Raymond, Seabrook and Portsmouth.
This year Derry has served close to 30 clients and the state-wide program has helped more than 800. “It’s real money,” she said of the Child Care Tax Credit, Earned Income Tax Credit, and other programs for low-income clients.
While Fredette is staff, she relies on volunteers to do a lot of the tax preparation. She has a corps of retirees who like helping people, and also some accounting and finance majors from UNH, who do the service for credit. “They learn the tax laws. One student said, ‘They got their refund, but I felt like I was the one who got paid,”
A pair of sisters similar to the Farmington woman came to her in Derry. The sister who was working thought they were getting a combined $658, Fredette recalled. “With the Earned Income Credit it was more like $4,000.” The sister went back to her disabled sister at home to discuss how they wanted to file, “and she was back the same day,” Fredette said.
The program doesn’t limit itself to the simple return, but will work with people of any filing status as long as they meet the income guidelines, Fredette added. For a small business that does a 1099 instead of a W-2, they can claim up to $10,000 worth of expenses on a Schedule C. They can claim up to 56 cents a mile.
“We don’t do any of the ‘ations’ – amortization, depreciation,” she said.
What misconceptions do people have about the program? Fredette ticked them off: “If it’s free, it’s not good.” “You get what you pay for.” Some people think they don’t make enough money to qualify, or that their situation is too complicated, she added.
In most cases clients bring in their bank statements, W-2s and other papers, and the volunteer does the taxes for them, then contacts them when it’s done. “It’s hard to stay here, with child care and jobs,” Fredette observed. “They come back for a 20-minute session to review it, and then it’s filed.” The program also has facilitators who will stay with the client and walk them through it.
The volunteers are certified with a program called Link and Learn through the IRS. They learn the tax laws, learn the software they will need to process someone’s taxes, and follow a strict ethics protocol. “There are no tip jars and no dating of clients,” Fredette said with a smile.
Though there are dozens of online programs to help people file, Fredette still thinks the volunteers and facilitators are needed. Gregg Woodes, the IRS Special Agent overseeing the programs in New Hampshire, once said to her, “Can’t people go online?”
Fredette remembers responding, “If you put computers and taxes in the same sentence, half of America is going to keel over.”
Fredette offered sessions in Derry in February and March and will offer one more on April 10. She can be reached through Derry Community Action at 965-3029.