California must expand poverty-fighting tax credit to working immigrants and their families

California is the land of extreme wealth and extreme poverty. In what has been called the “California Paradox,” our economy is thriving, but so many of our people are not.

One of the most effective tools we have to fight poverty and address this issue is the California Earned Income Tax Credit (CalEITC). Extending this vital tax credit to all income-eligible tax filers will help reduce disparities for over 600,000 individuals, including 200,000 children, regardless of status, and is one of the best things we can do to address income inequality in our state.

The CalEITC was created in part because our minimum wage is not rising high or fast enough to account for California’s rising cost of living. This tax credit can put up to $2,651 in the pockets of a single working parent with two children, plus an additional $1,000 if that parent has a child under the age of six.

The EITC is one of the most effective tools to fight poverty, and has been shown to improve health and education outcomes, as well as the future earnings of children whose families receive the credit.

Just last year, Gov. Newsom invested $1 billion in expanding the credit. This year, he declared January 31 - February 8 “CalEITC Awareness Week” to encourage people to claim it on their tax returns.

Here lies the paradox: Hundreds of thousands of working immigrants and their families are excluded from this vital benefit, just because they use an Individual Taxpayer Identification Number (ITIN) to file their taxes, instead of a Social Security Number (SSN). In fact, even if one person in the household files their taxes with an ITIN, the entire family – including US citizen children and legal permanent residents – is excluded.

Jennifer Siebel Newsom, the first partner of California, has lauded the CalEITC as an investment in the “too many Californians [who] are… struggling - trying to juggle raising children, often on their own, while working multiple jobs.” The attention to CalEITC and the increased investment in it are important. But California’s immigrant communities are also struggling, raising children, and working.

Excluding immigrant filers from tax credits creates vast disparities in after-tax income for parents who are working and earning the same amount as those with Social Security numbers. A “California for All” must really be for “all.” Without significant changes in our tax system, and making investments that fight poverty available to all Californians, the California paradox will continue.

The California Immigrant Policy Center’s report, “How Expanding CalEITC to Immigrant Workers is a Win for All of Us,” details the importance of the California Earned Income Tax Credit and why including all workers is a win-win for our state and for our communities.

It’s imperative to include immigrants in the CalEITC because our communities are being physically, psychologically, and economically targeted from all angles.

Federal anti-immigrant policies and proposals – such as the expansion of the public charge rule and the Department of Housing and Urban Development’s plan to exclude immigrants from public housing – seek to intimidate and penalize those who use public benefits by creating income tests for citizenship, evicting families, and by targeting low-income families for deportation. These harsh and hateful policies reinforce the Federal Administration’s message that all immigrants are not welcome.

California has made significant investments in supporting our immigrant communities, from extending healthcare to people who are undocumented to expanding legal services for those who are being threatened with deportation. But in a state with one of the highest levels of poverty and inequality in our country, we must ask ourselves: What more do we need to do to ensure that everyone, regardless of status, is able to put food on the table for themselves and their families?

Assembly Bill 1593 ensures that the CalEITC is available to everyone who files their taxes, regardless of status. Including everyone in the CalEITC is a crucial step for immigrant rights, for workers’ rights and for the effort to end poverty in California.

To learn more about the CalEITC, please visit www.CalEITC4me.org to see how much you could be eligible to receive through the credit.