Extending tax credits to undocumented workers

Photo illustration by Thomas Hamilton III, U.S. Army

By Jackie Botts


AB 1876 would allow undocumented workers who file taxes to get California’s tax refund for low-income residents, starting next spring. Previously, only households in which every breadwinner had a Social Security number could claim the refund, known as the California Earned Income Tax Credit. This spring’s budget deal extended the credit to undocumented workers who file taxes with an Individual Taxpayer Identification Number (ITIN) only if they had children under the age of 6. This bill would allow all California tax filers to claim the credit, regardless of their immigration status.


Immigrant and social safety net advocates like the California Immigrant Policy Center, United Ways of California, and the Western Center on Law and Poverty have backed numerous bills and budget measures to include ITIN filers over the past few years.


Though the bill faced no public opposition, past iterations of this proposal were opposed by the California Teachers Association, who worried that without a new funding mechanism, the money would be shifted away from public schools.


Last year, the governor nearly doubled the state’s budget for CalEITC, calling it one of “the most significant anti-poverty initiatives” of the year. He expanded income eligibility for workers making up to $30,000 a year and created a $1,000 boost for households with children under age 6. But since the tax credit was established in 2015, immigrant advocates have complained that it leaves out undocumented immigrants. This deal represents one way the Legislature is trying to assist undocumented workers, who make up one in 10 California workers, but have been disproportionately affected by pandemic-driven job loss and largely left out of state and federal safety nets.


The governor signed the bill on Sept. 18. “Undocumented front line workers leave their families every day to keep our economy running, but many are still struggling to make ends meet,” Newsom said, adding that the estimated 600,000 workers who will benefit “are taxpayers and should be treated like taxpayers.”