Tax Filing Assistance and Financial Education Programs for New Americans

If you are new to the United States, understanding the U.S. tax and financial systems is an important part of settling in. Tax filing, bank accounts, and the importance of credit scores in the United States may differ significantly from what you experienced in your home country.

Photo: Mikhail Nilov/Pexels

Federal, state, and local governments—along with many nonprofit and community organizations—offer programs that assist people with their tax obligations and strengthen financial literacy.

Many of these programs are available free of charge or at low cost to eligible individuals.

Common Types of Support

Depending on where you live and each program’s eligibility requirements, you may find services such as:

  • free tax preparation and filing assistance;
  • help for low-income individuals dealing with certain IRS disputes or issues;
  • financial education programs covering topics such as budgeting and expense management;
  • assistance with building or improving credit;
  • loan counseling;
  • guidance on using banking services; and
  • other community-based financial assistance programs.

Free Tax Preparation Through VITA

Filing taxes correctly may also help immigrants access benefits such as the Child Tax Credit, the Earned Income Tax Credit, or other assistance programs if they qualify.

The Volunteer Income Tax Assistance (VITA) program is supported by the IRS and provides free basic tax return preparation for eligible individuals.

VITA generally serves people with low to moderate incomes, people with disabilities, and taxpayers with limited English proficiency.

At VITA sites, trained volunteers who meet IRS certification requirements can help eligible taxpayers prepare and file their returns.

VITA services may be offered at:

  • libraries;
  • schools;
  • community centers;
  • nonprofit organizations;
  • faith-based organizations; or
  • other community locations.

Available services vary by location. Not every tax situation falls within the scope of what VITA volunteers are authorized to handle.

Tax Counseling for the Elderly (TCE)

In addition to VITA, the IRS supports the Tax Counseling for the Elderly (TCE) program.

TCE provides free tax assistance, with a particular focus on people age 60 and older. Program volunteers often have experience with tax issues involving pensions and retirement.

This service may be especially worth considering for immigrant families with older parents or relatives living in the United States.

Free Online Tax Filing (IRS Free File)

In addition to in-person assistance, some taxpayers may prepare and file their taxes online through IRS Free File.

IRS Free File offers online tax-filing options through participating partners to taxpayers who meet the income requirements established for each tax year.

For taxpayers who do not qualify for the free guided filing options, the IRS also offers Free File Fillable Forms. This option is better suited to people who are already fairly familiar with tax filing and can prepare their returns with limited guidance.

IRS Free File eligibility rules and income limits may change from year to year, so check the latest information directly with the IRS before each tax season.

Low Income Taxpayer Clinics (LITC)

If you are involved in a dispute or have certain issues with the IRS, a Low Income Taxpayer Clinic (LITC) may be a better fit.

Low Income Taxpayer Clinics are independent of the IRS and may assist eligible individuals with tax disputes involving the agency.

Depending on the circumstances and program requirements, an LITC may help taxpayers:

  • understand IRS notices;
  • resolve certain tax disputes;
  • obtain representation before the IRS or in certain related proceedings; and
  • understand their rights and responsibilities under the U.S. tax system.

Some LITCs also provide taxpayer-rights information and education for people who speak English as a second language. However, LITCs do not replace VITA for routine free tax preparation.

Can Immigrants Use Free Tax Preparation Programs?

Many tax assistance programs do not require users to be U.S. citizens. Eligibility generally depends on the specific program, the type of tax return, income, and the taxpayer’s individual circumstances.

Some taxpayers use a Social Security Number (SSN), while those who are not eligible for an SSN but have a federal tax filing obligation may need an Individual Taxpayer Identification Number (ITIN).

Financial Education and Counseling Programs

Beyond tax assistance, many community and nonprofit organizations offer programs that help newcomers understand the U.S. financial system.

Programs may provide guidance on:

  • creating a budget;
  • opening and using checking and savings accounts;
  • using debit and credit cards;
  • building a credit history;
  • managing and repaying debt;
  • saving for financial goals; and
  • recognizing common forms of financial fraud.

This knowledge is especially valuable because many immigrants are unfamiliar with the U.S. financial and credit systems.

Help Opening a Bank Account

Some banks, credit unions, and community organizations participate in programs designed to help people who are unbanked gain access to safe, low-cost accounts.

One example is Bank On, an initiative that works with local communities to expand access to bank and credit union accounts that meet certain standards for cost, transparency, and consumer protection.

Help Building Credit

One challenge many newcomers face is having no established credit history in the United States.

A credit score can affect many areas of life, including the ability to obtain a car loan or mortgage, rent a home, or access certain financial products.

Some nonprofit organizations and credit unions offer counseling, programs, or products designed to help participants begin building credit.

Options may include:

  • secured credit cards;
  • credit-builder loans;
  • credit counseling;
  • programs that explain how to read and improve a credit report; and
  • financial education programs.

Before signing up for any product, carefully review the fees, interest rates, terms, and the organization offering it.

Be Cautious of Unreliable Tax and Financial Services

Immigrants may be targeted by services that charge excessive fees or make misleading claims.

Be cautious if a tax preparer:

  • promises that you are guaranteed a very large refund;
  • asks you to sign an incomplete tax return;
  • asks for your refund to be deposited into the preparer’s account;
  • bases the fee on the amount of your refund; or
  • does not provide the required tax preparer identification information.

Also be cautious of companies that promise to quickly “erase” negative information from your credit report or guarantee a major credit-score increase within a very short time.

Whenever possible, choose official programs, reputable nonprofit organizations, or professionals with appropriate credentials and experience.

How to Find Help Near You

You can begin your search through:

  • the IRS VITA/TCE locator;
  • IRS Free File;
  • Low Income Taxpayer Clinics;
  • public libraries;
  • community colleges;
  • credit unions;
  • nonprofit financial counseling organizations;
  • the Office for New Americans or immigrant-support agencies in your state; and
  • local community organizations.

When searching online, try terms such as “free tax preparation,” “VITA near me,” “free financial counseling,” or “immigrant financial education,” along with your city name or ZIP code.

Key Takeaways

  • Immigrants may be able to access a range of tax-filing and financial education resources in the United States, depending on each program’s eligibility requirements.
  • VITA provides free basic tax preparation services to many eligible taxpayers.
  • TCE is specifically geared toward people age 60 and older.
  • IRS Free File may be an option for people who want to file online and meet the program’s requirements.
  • Low Income Taxpayer Clinics may assist eligible individuals who have disputes or certain issues with the IRS.
  • Community and nonprofit organizations may also provide financial education, credit-building support, and budgeting assistance.
  • Eligibility requirements vary by program, so confirm details directly with the service provider.
  • Be cautious of services that promise unusually large refunds, rapid credit repair, or require unusual fees.

Tools for Finding Free Tax Assistance and Filing Options

Note: This article provides general information and is not tax, legal, or financial advice. Rules and program eligibility requirements may change. Check current information with the relevant government agency or program provider before making a decision.