By Ashley Burnside

Update: On September 18, Governor Newsom signed AB 1876 into law, making the CalEITC available to all immigrant tax filers.

The Earned Income Tax Credit (EITC) is an effective anti-poverty program that has bipartisan support. But some working people and families are denied access to this tax refund because of their immigration status. Immigrant workers and families deserve equal access to the EITC.  States have the flexibility to create their own versions of this credit, which may have different rules than the federal EITC. Recently, California policymakers sent a measure to Governor Gavin Newsom’s desk to ensure people who are immigrants can access their state’s credit. He should sign the bill into law to provide a vital boost to families, supporting their health and that of the local economy.

Specifically, the California state legislature passed a bill (AB 1876) that would allow all income-eligible immigrants to access the California Earned Income Tax Credit (CalEITC). Similar to the federal EITC, CalEITC provides tax filers with a refundable credit during tax time. The California legislation would allow people filing taxes with an Individual Taxpayer Identification Number (ITIN) to receive the state tax credit if they meet the income eligibility criteria. The IRS issues an ITIN to tax filers who are not eligible for Social Security numbers, such as undocumented immigrants and student visa holders. With this change, California would join Colorado in ensuring immigrants who use an ITIN for filing their taxes can access their state EITC.

This CalEITC expansion would infuse money into California’s economy and provide financial relief to immigrants, who have been disproportionately harmed by the COVID-19 crisis. Governor Newsom should sign the bill into law to provide these workers and families with needed financial relief during the COVID-19 pandemic and beyond.

During the pandemic, working families are struggling to make ends meet as they face layoffs and economic uncertainty. The CalEITC provides financial relief that workers can use to pay for expenses such as rent, expenses related to work, and car repairs to get to essential jobs. It spurs economic growth by infusing money into local economies. But, with its restrictions on immigrant filers, this financial support is not reaching all the working people who need it.

About two out of three immigrants who lawmakers have excluded from the CalEITC are essential workers. These workers are jeopardizing their health and the health of their families to provide essential services to California communities. Many of them work in the food industry, ensuring families have enough to eat during the pandemic. These workers are heroes. They deserve access to financial support to help them make ends meet.

Other immigrant workers have lost their jobs due to social distancing and the economic recession. In California, immigrants are more likely to have lost their jobs during the COVID-19 pandemic than non-immigrant workers.

Increasing access to the EITC for immigrant families is important for kids’ health and economic security. Expanding the credit will likely promote better health, school success, and higher future earnings for children in immigrant families. An estimated one out of eight school-aged children in California may have a parent who is an undocumented immigrant and could stand to benefit from such a policy change.

Unfortunately, federal COVID-19 economic relief packages have largely left out immigrant workers and families. The stimulus payments passed under the Coronavirus Aid, Relief, and Economic Security (CARES) Act excluded families with at least one family member who files taxes with an ITIN. Unemployment Insurance (UI) also excludes immigrants without work authorization. This means immigrant families are denied the financial safety net other people have during this crisis, forcing them to face greater barriers to afford rent, food, and other necessities.

Until federal policymakers allow ITIN tax filers to receive the EITC, expanding the CalEITC will provide California’s families with mixed immigration statuses with essential financial relief during this unprecedented time of hardship.

Governor Newsom should sign AB 1876 into law to expand access to the CalEITC for immigrant individuals and families who are otherwise eligible based on their income. Without such relief, families will struggle to afford necessities and the state could see economic recovery stall. California and Colorado legislators recognize that making their state’s EITC available to everyone eligible, regardless of immigration status, will benefit workers, children, and the state economy during the COVID-19 pandemic and beyond. Other states—and the federal government—should follow their lead.