Two things that are making tax filing easy and free for Oregonians

For some Oregonians, the complexity and cost involved in tax filing is a barrier to doing their taxes. Oregonians who would be due a tax refund, who would get money back by filing a tax return, don't receive those dollars because they're unable to navigate the complicated process of preparing and filing a tax return.

In this episode of Policy for the People, we discuss two initiatives that are making tax filing easy and free. The first is Direct File. This online tool created by the IRS is now available to eligible Oregonians, explains Tyler Mac Innis of the Oregon Center for Public Policy.

The second thing is Oregon's Tax Infrastructure Grant program, a network of organizations that rely on trained volunteers to help low- and moderate-income Oregonians prepare and file their taxes. Riley Eldredge of MFS CASH Oregon, one of the organizations that are part of this network, discusses how free tax assistance can make a big difference in the lives of Oregonians, and why Oregon's Tax Infrastructure Grant program has a huge return on investment. 

Transcript

Tax filing season is underway. This is the time when we prepare and file our federal and state tax returns. Our tax system, of course, is how we come together to fund the things that we alone can’t or K-12 schools. Much of our healthcare system, firefighters who protect us from wildfires and so much more. Our system of taxation is absolutely vital to having a well-functioning society. 

Unfortunately, the act of preparing and filing tax returns is complicated. So much so that most of us end up paying a tax preparer, often a big corporation, to prepare and file our tax returns.

Think about how absurd that is: we pay to pay our taxes. For some, the complexity and cost involved in tax filing becomes a barrier. Oregonians who would be due a tax refund, who would get money back by filing a tax return, don’t receive those dollars because they’re unable to navigate the complicated process of preparing and filing a tax return.

The good news is that local organizations and the Oregon Legislature have been doing something about it. Today on Policy for the People we speak with Riley Eldridge, program director at MFS CASH Oregon. He explains how trained volunteers help Oregonians file their tax returns, what that means for their economic well-being, and what our state can do to further reduce the barriers to tax filing.

But we begin this episode by taking a few minutes to highlight a big development when it comes to tax filing: the fact that Oregonians now have a new online tool to file their taxes for free. That tool is Direct File. I spoke with my colleague from the Oregon Center for Public Policy, Tyler Mac Innis, about the importance of Direct File.

Juan Carlos Ordóñez (host): So, Tyler, this year Oregonians are able to access IRS Direct File. What is IRS Direct File and why is it a big deal? 

Tyler Mac Innis: It is a big deal. IRS Direct File is a new online tool from the IRS that will allow taxpayers to file their taxes directly with the IRS for free. And this is a big deal because it’s been a long time coming. More than two decades ago, when more and more Americans were turning to electronic filing, the then Bush administration floated this idea of creating a free way for taxpayers to file their returns online. And at the time that raised alarm bells at Intuit, the makers of TurboTax, who would go on to wage a decades-long campaign to block efforts at making filing free and accessible to all Americans. 

But finally, the IRS has developed and successfully piloted Direct File in 12 states last year to rave reviews, I should say. And this year, the program is available in 25 states, including Oregon. So this is a big win for Oregonians, particularly those who have relatively straightforward taxes, who will no longer have to pay a private company for the privilege of doing their civic duty and filing their taxes online. 

Juan Carlos: So who is eligible to use Direct File to prepare and file their taxes?

Tyler: Yeah, it’s a great question. There’s about 640,000 Oregonians who are eligible to file their taxes using Direct File this year. Direct File is currently designed for people who have relatively straightforward tax situations. So these are people who are largely earning their income from an employer using a W-2 or might get their income through Social Security, for instance. And it’s for people who take the standard deduction rather than itemizing their deductions. 

And I should note that people can use Direct File to claim tax credits like the federal Child Tax Credit, the Earned Income Tax Credit, and others. So Direct File is a free way for eligible taxpayers to easily claim those critical tax benefits that can be worth up to thousands of dollars for families in the form of a tax refund.

Juan Carlos: And what about the state tax return? Because we all have to file a federal and a state tax return. 

Tyler: There’s great news to share on the state front as well. Last year, the Oregon Department of Revenue also successfully piloted a state version of Direct File. And they’ve been working diligently with the IRS to integrate the federal and state systems over the last year. And so those systems have been integrated. And today, when someone goes to file their federal return using IRS Direct File, they’ll automatically be taken to the Oregon Direct File page, where they can easily file their state taxes for free, as well. 

Juan Carlos: So there’s been rumors circulating that the Trump administration and Elon Musk have set their sights on Direct File, and are or have shut it down. What should people know about that? 

Tyler: People should know that Direct File went live in late January, and as of the recording of this program, it is very much alive and accessible to all who are eligible to use the program. And in fact, I should say one of the best ways that we can work to protect Direct File into the future, and make sure that it grows in future years to include more tax situations, is to use it. So I would encourage anyone listening to this who is eligible to use Direct File to file their taxes using Direct File this year, if they can. 

Juan Carlos: If people want to see if they are eligible to use Direct File and to use this tool, what should they do? 

Tyler: People should go to directfile.irs.gov where they can learn more about Direct File itself and check to see if they’re eligible. There’s a very easy to use eligibility checker right on that landing page. And since filing season is now open, all 640,000 eligible Oregonians can begin filing their taxes today for free. So just head to directfile.irs.gov to learn more and see if you’re eligible. 

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Juan Carlos: Even with a big step forward that Direct File represents, when it comes to making tax filing easy and free, some Oregonians still require expert help in preparing their taxes. Such help is crucial if we want Oregon families struggling to make ends meet be able to receive tax credits, like the Child Tax Credit, that put more money in their pockets.

Here in Oregon, there is a network of trained volunteers that helps low income Oregonians prepare and file their tax returns. I spoke with Riley Eldredge, program director at MFS CASH Oregon, about their work helping Oregonians file their taxes. 

Juan Carlos: Riley, welcome to Policy for the People. 

Riley: Thank you so much for having me. I really appreciate it. Looking forward to this.

Juan Carlos: So, Riley, why don’t we start with you sharing a little bit about the work of Metropolitan Family Service’s CASH Oregon program? 

Riley Eldredge: Yeah, thanks. So Metropolitan Family Service is the organization. We’re a nonprofit established here in Portland, and we’re actually about to celebrate our 75th anniversary, which we’re pretty excited about. 

One of the organization’s key focuses is on economic empowerment, and that’s really where our CASH Oregon program fits in. So the way the way that I like to talk about it and to frame it is, what we’re really trying to do is, we’re seeking to resolve a problem that we’re seeing here in Oregon, and that problem that we’re seeing is that low to moderate income Oregonians are continually not getting access to some of the most powerful anti-poverty tools we have at our disposal in us. 

And they’re these little things called, and you might have heard of them, the Child Tax Credit and the Earned Income Tax Credit. Those credits combined represent thousands of dollars for families that can really help stabilize families and stimulate our local economy. And the problem that we’re seeing is folks just aren’t getting access to that over and over and over again.

Juan Carlos: Why is it that folks aren’t getting access to tax assistance? And why is this such a necessary service? 

Riley: Yeah. Why is it important? The whole problem that we’re seeking to address is really the tax filing system in the US has some serious barriers associated with it, which make it challenging for folks to access. So to demonstrate that, I would just like to ask, what’s the first feeling that you have when you think of filing your taxes?

Juan Carlos: That I’m going to be spending several hours trying to figure it out and putting them together, gathering documents? It’s not a fun time for sure. 

Riley: It’s not fun. Usually it’s a little scary. It could be a little intimidating. You’re sometimes like, I don’t know if I’m doing this quite right. It’s very commonly what people are experiencing. So in general, I like to categorize access to information as one big barrier that folks have. The system is super intimidating. It’s scary. And it’s really not taught either. It’s the other thing that’s frustrating with it. 

The other thing that’s challenging is that it’s literally changing every single year. The rules are a little bit different every single time. And so our goal posts, our benchmarks, are constantly changing and moving. So in addition to just that structural part, just navigating the systems in place – like, how do I get my w-2s, where’s my 1099, and how do I get access to all those documents and get them into one spot? – is often super confusing and complex. Not everybody has the tools and bandwidth to be able to navigate through all that. 

The other big barrier that we see is language. It’s actually a big part of that challenge. You know, the system is almost exclusively available in English. And even though it’s in English, it’s almost incomprehensible in English because it’s using a lot of terms that are not well understood, probably by like 98% of the population. And so language consistently is a problem. 

And so that’s another big thing that we’re seeking to address is how do we make that more available and open for many different languages that are coming through? This is especially a challenge for immigrant refugee populations that are coming through, that might be seeing the tax system for the first time, and they’re overwhelmed and not even understanding the framework is in place.

And then you identified it as well: cost is a big one that we see out there. Virtually all tickets to the ride you need to pay for a tax preparation service. Even to use some software, you’ll have to pay. So typically, there’s those three barriers that are in place there.

So what we’re seeking to do is eliminate those barriers so that everybody can get access to what they’re rightfully entitled to. And that’s really where volunteer tax preparation can lead the charge because we can have knowledgeable folks helping folks navigate through the variety of languages out there at no cost for our folks.

Juan Carlos: So you already alluded to this a little bit in your various answers, but how would you describe the clients that CASH Oregon serves? Or maybe said differently, what populations or communities do you tend to serve? 

Riley: It’s a broad range of individuals who are coming to about 18 different tax sites we have, both in-person and virtual, and our focus really is on low to moderate income families. We define that as any household making below $67,000 or lower year. That actually corresponds with the EITC, the upper limits of the Earned Income Tax Credit. But we’re also seeking to serve folks that are limited English proficient. We define ourselves as a culturally responsive organization, meaning we help a broad range of individuals that have many different backgrounds.

Our largest demographic coming through is Hispanic/Latino, but we also have over 25 different language requests that are coming up within the sites. So there’s a variety of individuals that are coming through. To best highlight this, our oldest client in 2024 was 101 and our youngest was 13. 

Juan Carlos: About how many folks do you serve during tax filing season? Do you have a sense? 

Riley: I do have a good sense of that. We just wrapped up all of our tax preparation services for 2024, and we helped a little over 9,000 individuals prepare their taxes throughout Oregon and Southwest Washington. If you take a step back and look at all of those monies going to those 9,000 families, it’s a little over $21 million that went to those folks, which is just astounding. 

Juan Carlos: And this is the money that they get back in refunds and greater refunds because of the various tax credits like the EITC or Child Tax Credit. 

Riley: Yeah, that’s right. So, just for example, you know, for those 9,000 families, if you looked at the Earned Income Tax Credit in the Child Tax Credit, there’s about $6million just in that. And then on the Oregon side for Oregon taxes, last year was a big year. There was the kicker, as well as the Oregon Earned Income Credit, as well as a new Oregon Kids’ Credit that came into effect. So you take all of those and combine all those things together, we’re talking about $21 million just for those 9,000 families, which is a big number.

Juan Carlos: What have you heard from your clients in terms of what getting tax preparation and filing assistance means for their economic well-being? 

Riley: We asked our folks what their plans were for their refunds: 62% of them said it was going into paying down debts and paying bills; 22% of them said it was going to savings, be it long term or short term savings.

We also did some interviews with folks. Overwhelmingly they talked about a sense of relief that they have coming to our VITA, because they’re experiencing a lot of stress and anxiety around this. I think the social well-being of folks coming through and having a sense of relief – of like, oh my gosh, this has been taken care of, and it’s actually being done right, and I have tools to make that happen –  are as important as the economic factors. So 66% of our clients report that they feel less stressed or concerned after coming into our site. 

This came out a couple of years ago, but I think it was just a nice way of visualizing this. But we had a mom coming in with her three kids, and we spent, you know, an hour and a half, two hours working with them, getting everything done and teed up and having a review just right.

But, you know, push came to shove by the end of that experience, she was getting about $6,000 due to the Child Tax Credit and some other impactful tax credits. And the volunteers asked,  what’s your plan for your refund? And she responded, I’m going to be purchasing beds for the kids. And the kids who were sitting right there were totally surprised by this and like, totally elated and excited about it. It’s those points in time when you realize how important the work is that what we’re doing is actually helping people in their everyday lives.

Juan Carlos: So you mentioned the volunteers doing this work. Can you say more about who is doing the tax preparation and how they come to this kind of volunteer work? 

Riley: It’s a major component of what we do. A primary focus of what we’re doing as an organization is thinking about the bread and butter of what we do: we need more volunteer tax preparers in order to meet the substantial need that’s out there. So we spend a lot of time thinking about, how can we recruit, how can we train, and how can we onboard volunteers in a successful environment so that we can help that many more people? 

So this year we’re striving to have about 300 plus volunteers to serve at our 18 sites. But, broadly speaking, the volunteer base is a pretty diverse space. We have a lot of students. We work a lot with the local universities in identifying students that are looking to build up their careers and their pathways. This is a really good and unique opportunity for them to get their feet on the ground and think about what’s next in their professional career. Maybe taxes or accounting is in their future. So that’s a big pool that we, that we pull from. Folks working 9 to 5 that are just wanting to be involved in helping their specific communities. We have sites that are open literally every single day of the week. So there’s weekend opportunities. There’s after-hour opportunities.

And then, another big pool that we pull from our folks that are retired, and are looking to stay engaged within their communities, and give back meaningfully into their communities. This is a wonderful option for them as well. The minimum that we ask is for folks to do four hours a week during the tax season, but we have some folks that are doing up to 48 hours or beyond, volunteering and doing this. I mean, the sky’s the limit on how much folks can give to the community. And our big goal is we want to recruit and train and onboard these folks so that they can have a good experience to provide these services that much more out into the community. 

Juan Carlos: And if listeners were interested in volunteering with MFS CASH Oregon, where should they go?

So this is the part I’m most excited about. We are doing recruitment year round. So if you are remotely interested in learning about taxes – and I really think of it as a life skill; in many ways it’s a confusing subject that is not taught – we will teach it for no cost. All you got to do is go to cashoregon.org. We’re holding orientations for folks year-round, and just want folks to get involved in this. The training is all online and can be done self-paced. So it’s a really wonderful thing. So just go to cashoregon.org and there’s a volunteer section and it really does a good job outlining what that could look like.

Juan Carlos: So MFS CASH Oregon is part of a larger ecosystem of volunteer tax assistance programs here in Oregon. And a few years back the legislature started nurturing this ecosystem. It started investing money in tax assistance through the Tax Infrastructure Grant program. What can you tell us about the Tax Infrastructure Grant program and what it has accomplished thus far? 

Riley: I think I’m going to answer that in two ways. So one is yes, there is a statewide initiative with the Tax Infrastructure Grant program. And even further back, there’s the VITA initiative as a whole. So this whole VITA initiative is actually under the IRS. 

Juan Carlos: What does VITA stand for? 

Riley: Oh my gosh, thank you for stopping me. It stands for Volunteer Income Tax Assistance. And these are different organizations throughout the country that sign up to say yes, we want to get involved in this work. And the IRS provides parameters of what sort of tax preparation activities we can get involved in. So, there’s a nationwide effort. And then if you zoom in even further on Oregon, like you said a couple years ago, we started up this Tax Infrastructure Grant program. This is specifically under Oregon Department of Human Services, in which they’re seeking to address Oregon’s EITC problems, by really bolstering and empowering volunteer tax preparation and outreach activities amongst organizations throughout the state, so that we can get some on the ground work done. So MFS CASH Oregon is one example of this. There’s actually 13 members within this coalition of organizations that are receiving funding to do and implement this work. So there is again, a national level that has some funding with it, but it’s really bare minimum.

So I think we’re in a better spot with Oregon having this additional resource to help bolster a local response that’s needed. So, you know, I can say for full certainty what this has meant for us, receiving these statewide dollars. It’s really enabled us to have staffing so that we can now do year-round tax preparation comprehensively.

We can also do year-round recruitment and training. And we actually have office spaces now where we can actually do this work. So it’s really helped us a lot in being able to grow and build out this service to be responsive to the bigger need that’s out there. 

The results are pretty cool. If you look from 2023 to 2024 and you look at all the members, there was a 43% increase in productivity just in this last year. I think that’s amazing to see. It shows how important these dollars on a statewide level have been.

Juan Carlos: To what extent are volunteer tax assistance programs in the Tax Infrastructure Grant program able to fulfill the need for tax assistance? Are there people out there who you’re not able to reach who are in need of assistance, but simply there’s just not enough resources to to assist them? 

Riley: Yeah, the need is immense. And it’s humbling, to be honest. So just for context, in 2024 we looked at all of the incoming calls that came into MFS CASH Oregon.We got about 21,000 calls that came into our pipeline. And like I said, we were able to help about 9,000 individuals with their returns. But that’s just on our one local level. Another way of looking at this is Oregon EITC participation rates. We consistently rank close to last in, when you compare to other states, on how much of our EITC is getting utilized. There’s been some rough numbers that have been thrown out there, but to get us to like 90% EITC utilization rate – soout of 100%, 90% of the folks that are eligible for it to get it – there is an estimate that we needed to file about 64,000 EITC returns to get that done. And keep in mind, that’s just Earned Income Tax Credit returns. And, you know, for our 9,000 returns that we filed about 20% of them were getting EITC. So the need is immense. 

And the other thing that I think is really interesting to see is we have so many people coming in to our sites that are like, hey, I’m behind two, three, four, five, six, seven years of returns. How do I even start? How do I even get going on this? And that takes a lot of time, focus and energy helping somebody through that.

One of our biggest limiting factors in this whole thing is how many volunteer preparers we can successfully train and onboard. This year, we’re on track to expanding that out more, thanks largely to some of these state dollars coming in. So the need is big. That need is immense. And we’ve got a lot more work to do.

Juan Carlos: Do you think the Oregon Legislature needs to do more in terms of supporting the tax infrastructure grant program? 

Riley: I do. Again, the scope of need that is out there right now affecting so many low to moderate income Oregonians is enormous. And on top of that, this really isn’t simple or easy work. Somebody coming in with 6 or 7 years of taxes to do. Like that’s a lot of untangling and looking through and making sure that we’ve got the right answers for the entire thing. 

Juan Carlos: So House Bill 2991, in the current legislative session, would, in fact, put in more resources into the Tax Infrastructure Grant program. I’m wondering if you can speak to this bill and what it would do, what your hopes are for what this kind of legislation could accomplish?

Riley: The only way for me to answer that as a local provider is to look at, you know, what are the types of things that we could do on the ground with additional support? This realistically means we could think about, can we expand our student intern program? Can we expand our facilities to be in areas where we know folks need the service, but we don’t have the resources to be able to do it and provide staffing that could actually go out and help make that happen?

Part of that is trying to spread out the geographic presence of this program to be stronger throughout Oregon. So, for example, I know more rural areas have been in discussion quite a bit on trying to think about how we can access those areas better. As, as a whole, the broad goal is we have a lot more production that we need to do as a coalition, and we need resources to be able to envision that and make that happen.

Just looking at the results of the VITA sites and what that means for the community members that we’re able to to serve, there’s there’s an immediate sense of return that you have with initiatives like this. We’ve got dollars coming back into these communities that not only stabilize those families in a real, meaningful way, but I also think it just stimulates the local economy.

So it’s really a win-win from my perspective to strengthen these VITA partners so that we can strengthen our families, to get the monies that they’re rightfully entitled to by law to make a stronger Oregon.