The FDIC seeks to encourage more U.S. households to open insured bank accounts and save money during the tax season. While working with the Internal Revenue Service’s (IRS) Volunteer Income Tax Assistance (VITA) providers, taxpayers can receive assistance with preparing and filing their taxes at no cost, including filing for tax credits and refunds for which they qualify. The FDIC intends to reach low- and moderate-income (LMI) individuals – including people who earn $67,000 or less per year, people with limited English proficiency, persons with disabilities, and young adults.
Our Strategy
We will build on existing national partnerships and robust, local networks comprised of government agencies, nonprofit organizations, and insured depository institutions to reach individuals where they live and work. Through “More Banks, More Volunteers, and Stronger Partnerships,” this national FDIC initiative seeks to meet the need for access to banking services at IRS VITA sites1 and increase the number of volunteers at VITA provider locations who can respond to the increased demand for taxpayer assistance. To execute, we will:
- Facilitate partnerships between banks and VITA providers;
- Engage national and local stakeholders to connect consumers to safe and affordable banking products and reach more populations that are disproportionately unbanked;
- Increase awareness in the banking industry and the public about opportunities for consumers to get banked and save during tax time; and
- Provide information to FDIC employees on how to volunteer with a VITA provider.
Reaching Banks and Consumers
Through our partnerships and networks, we will seek to facilitate an increase in the number of:
- Banks that engage in local VITA partnerships; and
- LMI consumers who file income taxes, receive tax credits for which they are eligible, receive tax refunds (via direct deposit) into an insured bank account, and save a portion of their refund.
The Importance of Reaching Households During Tax Time
- The FDIC’s Survey of VITA Providers underscores the promise of increased collaborations between FDIC-insured banks and local providers of the IRS VITA program, to help unbanked tax filers open and sustain bank accounts. In this recently released survey, VITA providers indicated their willingness to connect clients to safe and affordable bank accounts and interest in finding bank partners that provide these banking products.
2025 marks the 50th anniversary of the Earned Income Tax Credit (EITC)2 and the IRS wants more qualified households to claim their tax credit3. Approximately 20% of EITC-eligible taxpayers have not received the tax credit in recent years.4 This represents approximately $14.6 billion in unclaimed credits for five million households in 2023.5 For many U.S. households, particularly those with low and moderate incomes, their tax refund may be the largest payment they will receive all year. This presents a tremendous opportunity to increase awareness about how receiving a tax refund can be a “bankable moment” for many unbanked households6 to open an insured account and start saving.
What Can Banks Do?
The FDIC encourages financial institutions to develop relationships with local IRS VITA providers. Collaborations with the VITA program provides financial institutions with opportunities to offer financial education, open bank accounts, encourage saving a portion of tax refunds, and provide related financial services to unbanked and underbanked individuals.
Banks can learn about eligibility for favorable consideration under Community Reinvestment Act (CRA) regulations and opportunities for unbanked households to open a bank account to receive their tax refunds electronically, by visiting the FDIC Banker Resource Center, specifically the "Opportunity to Provide Free Tax Assistance to Consumers" webpage.
What Should Consumers Know?
To receive their refund safely and quickly, consumers should Get Banked! prior to filing their income taxes and choose to receive their tax refunds via direct deposit to an account at an insured depository institution. Consumers can use the VITA Locator Tool or call 800-906-9887 to contact a local VITA provider and determine if they are eligible to receive free tax return preparation services.
How Can Other Stakeholders Contribute?
Stakeholders, including community organizations, government entities and others who directly serve LMI communities can also help connect consumers to safe and affordable banking products and reach more populations that are disproportionately unbanked.
Stakeholders who work directly with banks can:
- Increase bankers' awareness about the VITA Program and eligibility for favorable consideration under CRA regulations by visiting the FDIC Banker Resource Center.
- Encourage more banks to offer affordable and sustainable bank accounts, including certified Bank On accounts
Stakeholders who work directly with LMI consumers can increase awareness about:
- How to claim the EITC;
- The free, IRS-certified tax preparation services offered through VITA providers; and
- How to open an affordable FDIC-insured bank account – the safest and fastest way to receive their tax refund
Footnotes
1 FDIC Survey of VITA Providers, June 2024
2 A federal tax credit for eligible low- to moderate-income workers and families with qualifying children.
3 https://www.eitc.irs.gov/eitc-central/eitc-information-for-press/awareness-day/eitc-awareness-day
4 EITC Participation Rate (Tax Years 2014-2021)
5 For tax year 2022 EITC returns processed in 2023, more than 23 million workers and families received approximately $57 billion in EITC and the average EITC received nationwide was approximately $2,541 (Source: IRS Statistical Sample). Therefore, the 20% who did not claim EITC represents approximately 5.75 million additional households.
5.75 million households x $2,541 average EITC = $14.6 billion unclaimed EITCs.
6 Nearly half of newly banked households in 2021 that received government payments said these payments contributed to their decision to open an insured bank or credit union account. (FDIC 2021 National Survey of Unbanked and Underbanked Households)