SACRAMENTO, Calif. — Undocumented immigrants with young children will now have a chance to get two tax breaks in the California budget now headed to Gov. Gavin Newsom for his expected signature.
The tax credits will be available to eligible California workers with Individual Tax Identification Numbers and at least one child under the age of 6. Currently, the California Earned Income Tax and Young Child Tax credits are available only to eligible California workers with Social Security Numbers.
Alissa Anderson, a policy analyst at the California Budget & Policy Center, said the budget provision is the first time the Senate, Assembly and governor have agreed to include the tax break for ITIN filers.
She credits the “growing momentum” from some California mayors, legislators, legislative caucuses and years of work from advocacy groups that made the tax breaks possible during a year in which the state budget faced a $54 billion deficit.
It’s possible the pandemic also played a role, she said.
“We have existing inequities in California, and the COVID crisis has just amplified those,” Anderson said. “We know that immigrants have been hit especially hard by the economic crisis. This crisis is really highlighting that there’s no time for inequitable policies.”
Republican Assemblyman Jay Obernolte of Big Bear Lake spoke against the proposal on Friday.
“I wish more of us were talking about the costs involved in this program,” he said. “This would be better done in a future year, especially when we are facing a $54 billion deficit.”
Expanding the earned income tax credit would cost $65 million, according to the state Legislative Analyst.
Noncitizen immigrants without Social Security Numbers were left out of federal stimulus packages and don’t qualify for unemployment insurance benefits. In April, Newsom announced an effort to provide disaster relief assistance to 150,000 undocumented Californians.
The tax breaks would benefit an estimated 32,000 to 46,000 families. Families with children over the age of 6 are excluded from the tax breaks, Anderson said.
A California Budget and Policy Center report notes that undocumented immigrants pay an estimated $3.2 billion in state and local taxes yearly in California. About $157.9 million of that is personal income tax.
“It’s a really big step, especially during a time of budget deficit,” said Sasha Feldstein, economic justice policy manager at the California Immigrant Policy Center. “Unfortunately, this is nowhere near enough.”
Feldstein said the tax expansion leaves out the majority of ITIN filers and continues to create economic disparities among them.
Many immigrant workers are on the front lines of the pandemic, she said, yet aren’t eligible for unemployment insurance and federal stimulus payments.
“They’ve been left with nothing while they’re continuing to be deemed essential,” Feldstein said.
She said the organization will continue fighting until every ITIN filer is eligible for the California Earned Income Tax Credit.
Unai Montes-Irueste, communications director for United Ways of California, called the the tax expansion “a major step forward.”
“It is going to mean a lot to those families, especially during this time, in which we’re suffering an economic downturn,” Montes-Irueste said. “It’s a game changer.”
A head of household making $12,000 a year or less, with two children under six, can earn $1,240 through the California Earned Income Tax Credit and $1,000 with the Young Child Tax Credit, a tax calculator from the public-private campaign CalEITC4Me shows.
A Medi-Cal expansion for undocumented seniors over 65, regardless of their immigration status, did not make it into the final budget deal. The Medi-Cal expansion was included in the unfinished spending plan sent to Newsom June 15. The expansion would have gone into effect in 2022, with Newsom having the authority to delay its launch based on the state’s ability to afford the cost.
California Sen. Elena Maria Durazo, D-Los Angeles, told The Sacramento Bee she was happy about the tax breaks for undocumented families, but was “sad and disappointed” about the Medi-Cal expansion’s indefinite delay in the state budget.
“When a senior asks me a question, ‘When am I going to be covered?’ I don’t know what to say,” said Durazo, who serves as vice chair of the California Latino Caucus.
Durazo said she had raised the concern to Newsom, saying covering seniors would help control the spread of COVID-19.
In the last four years, California has expanded Medi-Cal to undocumented children and young adults. The coverage for young adults up to age 26 began in January this year.
©2020 The Sacramento Bee (Sacramento, Calif.)