More undocumented Californians would get state tax credit under proposed law
A new California budget bill would allow more undocumented immigrants to receive a state tax credit worth hundreds of dollars, loosening restrictions on a program that Gov. Gavin Newsom in June opened for the first time to some residents regardless of immigration status.
Advocates for undocumented immigrants have sought the tax benefit, known as the Earned Income Tax Credit, for years. They argue undocumented immigrants pay a number of taxes and should benefit from services meant to help people in financial straits.
Newsom in June signed legislation that allowed undocumented residents to qualify for the California Earned Income Tax Credit if they have children under age 6. Expanding it to all undocumented households would cost the state about $65 million a year, according to the Franchise Tax Board.
Advocates for immigrants and low-income households said they were surprised to see the proposal appear in a budget bill published late Thursday night, just four days before the end of the legislative session
“I was actually caught off guard by this,” said Alissa Anderson, a senior policy analyst at the California Budget & Policy Center. ”It’s really great to see California’s leaders taking a really important step to end an exclusionary policy that we know was contributing to racial and ethnic disparities in our state.”
Anderson estimates the proposed expansion could help between 500,000 to 700,000 Californians. The proposal would allow every Californian who earns less than $30,000 a year would be able to access the tax credit if the bill passes by this year’s legislative deadline Monday night and Gov. Gavin Newsom signs it.
“This is a really important step forward,” she said. “Right now, we really need to make sure that families have every resource possible because we’re in the midst of both a pandemic and the worst recession in generations. We know that immigrant communities have been hit especially hard by this crisis.”
A person, with no children, earning $12,480 a year would receive $136 through the California Earned Income Tax Credit. A parent with two kids earning the same amount yearly would receive $1,059 through the tax credit.
The proposed tax credit expansion represents another effort by California Democrats to support undocumented households during the coronavirus outbreak. After federal emergency coronavirus aid packages left out undocumented immigrants, California became the first and only state to provide $75 million in disaster relief assistance to undocumented Californians.
Among Californians who experienced job losses during the pandemic, women who are immigrants experienced a 26% decline in employment between February and June, compared to the 17% decline women who are not immigrants experienced, according to a California Budget & Policy Center analysis. Among men, immigrants faced a 17% decline compared to the 11% decline that men who are not immigrants faced.
Ira Mehlman, media director for the Federation for American Immigration Reform, a nonprofit that seeks to end illegal immigration, said California should focus funds on addressing other issues like the state’s homelessness problem or COVID-19 crisis.
“We should not be rewarding people who are here in violation of the law,” he said. “It is just going to make it more difficult for law-abiding, hardworking Californians who are just faced with all sorts of hardships at this time.”
More than 2 million undocumented immigrants live in California. A California Budget and Policy Center report notes that undocumented immigrants contribute an estimated $3.2 billion in state and local taxes yearly in the state. About $157.9 million of that is personal income tax.
This story was originally published August 29, 2020 at 6:00 AM with the headline "More undocumented Californians would get state tax credit under proposed law."