Medford, OR – Oregon lawmakers are considering a proposal to nearly double the funding for a state program that provides free tax preparation services to low-income families. The move comes as the program, which helps residents claim critical tax credits, faces increasing demand and strained resources.
Created in 2022, the Tax Infrastructure Grant Program was designed to help low-income Oregonians access tax credits, particularly the federal Earned Income Tax Credit (EITC), by overcoming barriers like limited English proficiency and lack of internet access. The program funds over a dozen organizations across the state, including universities, nonprofits, and legal aid groups, which provide year-round tax assistance to qualifying families. These services are often provided by volunteers and interns, offering one-on-one, in-person tax filing support.
Department of Human Services (DHS) spokesperson Jake Sunderland acknowledged that the current $8 million allocated for the program is insufficient to meet growing demand. In response, a bipartisan group of lawmakers introduced House Bill 2991, which proposes increasing the program’s funding to $14 million over the next two-year budget cycle. The aim is to expand services to meet the rising need for free tax preparation.
One of the program’s key features is its emphasis on in-person assistance, which is vital for individuals who face language barriers or lack the digital tools to file taxes online. Although Direct File Oregon, a free online tax filing service, was launched last year, it is not accessible to everyone. Daniel Hauser, deputy director of the Oregon Center for Public Policy, noted that people with limited English proficiency or those without reliable internet access often require the personalized support that the Tax Infrastructure Grant Program provides.
In 2024, more than 14,000 taxpayers utilized the program, with an average gross income of just $27,818. Many of these individuals had either never filed taxes before or had only done so sporadically in the past five years. The program has proven especially beneficial to single individuals with no dependents, who often miss out on valuable tax credits like the EITC due to a lack of knowledge or support.
Data from DHS also revealed that Oregon has one of the lowest rates of EITC claims in the nation. In 2021, only 75.2% of eligible taxpayers claimed the federal EITC, ranking the state just ahead of Alaska and Washington, D.C. Reaching a higher claim rate would require an additional 60,000 eligible taxpayers to file and claim the credit each year. This gap in claims is particularly pronounced in rural areas, where there is limited access to tax preparation services.
While the majority of participating organizations are located in urban centers and along the coast, rural regions, especially eastern Oregon, have fewer accessible and affordable tax preparers. The proposed funding increase would enable the program to expand to these underserved areas, potentially reaching more eligible taxpayers in need of assistance.
The program’s success is evident in its economic impact. In 2022, Oregon taxpayers received $460 million through the EITC, benefiting 218,000 individuals, with an average refund of $2,100 per claimant. For many low-income Oregonians, like Brandy Nelson-Chalmers, a waitress from Coos Bay, this support can make a significant difference. Nelson-Chalmers received nearly $4,000 in tax credits after using Moneywise, a tax preparation organization funded by the program, to file her taxes. She plans to use her refund to make home repairs, including fixing a rotting doorway.
The Tax Infrastructure Grant Program is expected to generate significant economic benefits, with an estimated $100 million more in potential refunds for eligible taxpayers if the program reaches more people. This, in turn, could boost local businesses and contribute to a stronger Oregon economy. Daniel Hauser described the program as highly efficient, with the return on investment far exceeding the program’s costs.
The proposal to increase funding for the Tax Infrastructure Grant Program is not the only legislative effort aimed at improving tax assistance in Oregon. Lawmakers are also considering a bill that would double the state’s Earned Income Credit (EIC) amount starting next year, further supporting low-income residents.
If approved, House Bill 2991 would provide much-needed resources to expand tax assistance to more Oregonians, especially in rural areas, helping them claim the tax credits they are entitled to and potentially boosting the state’s economy in the process.