Starting in 2021, taxes will look different for some immigrants. After a long fight to extend tax benefits to undocumented immigrants in California, qualified immigrants will now be able to receive California’s Earned Income Tax Credit (Cal EITC). CalEITC is a credit that low-to-moderate income California workers can claim on their taxes which often results in a refund, or cash back, from their taxes.
Back in May, the Industrial Areas Foundation (IAF), the nation’s largest and oldest community organizing group, had organized a Zoom call with more than 1,200 participants to encourage immigrants to take charge of their political impact and talk about expanding the Cal EITC. Most of the participants were immigrants, and a vast majority of them didn’t have a Social Security Number.
“I don’t understand why they can give us an ITIN number to pay taxes, but in this situation, we don’t get any kind of help,” Cristina Garcia, an immigrant who has been paying taxes for 18 years but lost her house cleaning and child-care income because of the pandemic, said during the call.
Flashforward three months later, IAF and its supporters were celebrating Governor Newsom and the California Legislature decision to approve the extension of benefits.
“Particularly with where the economy is at right now. This is just a really critical investment that the state’s making in essential workers,” said McManus, an organizer with the IAF.
The move was further celebrated by various activist organizations who called the measure a “great start” and the “right direction.” Ever since the Golden State introduced CalEITC, organizations like IFA and United Way California have asked for it to be extended to immigrants without a Social Security Number (SSN). Those immigrants typically file their taxes using an Individual Taxpayer Identification Number (ITIN), and together, they contribute $3.2 billion in state and local taxes.
However, the organization also pointed out that the new measure has very obvious limitations. To be able to qualify for the tax credit, the ITIN filer must have a child age 6 or younger, which leaves out a majority of ITIN filers, including 178,000 children. In total, more than 500,000 immigrants and their families, who are already excluded from COVID-related financial federal assistance, will be left without support.
“By continuing to exclude 3 in 4 children in ITIN households, California is missing out on bigger reductions in poverty and economic stimulus we could achieve at modest cost,” the organization wrote in a press release. “The current expansion is a good step, but full ITIN inclusion is critical and necessary to ensure recovery from the COVID-19 pandemic is truly a recovery for all.”
The families who qualify will be eligible for two tax credits: the California Earned Income Tax Credit and the Young Child Tax Credit which, depending on the family’s situation, could total up to $2,600. California’s State Senator, Bill Monning, said that the next step is to inform undocumented workers about the change.