Banks Foot Bill To Give Low Earners Free Tax Aid

The Bergen Record ( — Saturday, January 27, 2007


A consumer watchdog is doing free tax preparations in Newark for New Jerseyans who earned less than $40,000 last year.

Hackensack-based non-profit New Jersey Citizen Action, which has been protesting tax-preparation fees charged by the Jackson Hewitt chain, announced Friday that it opened its own center this week at 24 Clinton St. in Newark.

Executive Director Phyllis Salowe-Kaye said the group opened the center to encourage lower-income taxpayers to file and to take advantage of the earned-income tax credit if they qualify.

The goal is to do 1,000 tax returns this year and, if the project is successful, expand to more New Jersey cities in years to come.

"Newark residents left $16 million on the table last year by failing to apply for the earned-income tax credit," Salowe-Kaye said, citing Internal Revenue Service records.

The earned-income tax credit, enacted in 1975, provides a tax credit for low-income workers, even if no income tax was withheld from a worker's pay.

New Jersey Citizen Action also wants to steer lower-income taxpayers away from the for-profit tax-preparation services that encourage cash-strapped customers to sign over their tax refunds in exchange for high-interest-rate loans.

Any state resident who meets the income requirement can use the free service, which will be available through the April 16 tax-filing deadline.

The center, funded largely by corporate contributions, is open from 11 a.m. to 8 p.m. Monday, Tuesday, Thursday and Friday and from 9 a.m. to 4 p.m. on Saturday.

The center, which has seven paid full-time tax preparers, will cost about $450,000 to operate this year, Salowe-Kaye said.

The primary contributor is Sovereign Bancorp's Sovereign Endowment Fund. Other donors include Wachovia, Bank of America, JPMorgan Chase, Citigroup, Commerce, HSBC, North Fork, PNC, TD Banknorth, Washington Mutual, Verizon, PSE&G and the New Jersey Citizen Action Education Fund.

Jack Killen, senior vice president of Sovereign Bank, said the project is meant "to help increase economic opportunity for low-income individuals and families."

"It's hard to judge the impact the program will have on bringing unbanked customers to the bank," he added.

Newark Mayor Cory Booker and New Jersey Public Advocate Ronald Chen are scheduled to speak at a press conference at the center at 10:30 a.m. Wednesday.

Appointments for tax prep work are being taken by phone at 888 TAXES11 (888-829-3711), and walk-ins are welcome.

Some of the banks will have representatives at the center opening bank accounts for filers who do not have one and would like to have tax refunds deposited electronically.

The center is the first and only one run by New Jersey Citizen Action, but is part of a network of a dozen tax-preparation centers run by non-profits in the Newark area.

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