Why California Should Extend the CalEITC and Young Child Tax Credit to Immigrant Families & Communities

SACRAMENTO, CA – The California Budget & Policy Center released a new report today showing that while California has significantly expanded its Earned Income Tax Credit – known as CalEITC – in the last few years, hundreds of thousands of immigrant families face social and economic disparities because they are excluded from the tax credit even though they file taxes.

In the Budget Center’s latest piece – Five Reasons Why California Should Extend the CalEITC and Young Child Tax Credit to Immigrant Families and Communities – Senior Policy Analyst Alissa Anderson outlines the strong equity and economic cases for making the credits inclusive of immigrant families.

Among the report findings: Children whose parents have the same work earnings experience huge disparities in after-tax income due to tax credit exclusions. The decision by state policymakers to follow federal EITC eligibility rules that require tax filers and their children to have Social Security Numbers that are valid for work in order to claim the credit, and not allowing Individual Taxpayer Identification Numbers to be used to claim credits, means that similarly situated families are treated differently by the tax code. And this has significant consequences for families’ ability to achieve economic security and meet the basic needs of their children.

Given ongoing interest among state policymakers in reviving a 2019-20 state budget proposal to extend these tax credits to immigrant families, this new analysis from the Budget Center explains why immigrant families who pay taxes, earn little from their jobs, and experience significant economic disparities should be eligible for the CalEITC and Young Child Tax Credit.

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The California Budget & Policy Center engages in independent fiscal and policy analysis and public education with the goal of improving public policies affecting the economic and social well-being of Californians with low and middle incomes. Support for the Budget Center comes from foundation grants, subscriptions, and individual contributions.