Expanded New York Earned Income Tax Credit Could Help Thousands of Immigrant Families


Federal and state eligibility rules disqualify those who produce individual tax identification numbers, or ITINs, a common practice among immigrant workers. Experts estimate that there are approximately 107,610 children in households reporting ITIN in New York state.

Jarrett murphy

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Another school year has just started, and one of the strategies adopted by the government to reduce child poverty has been tax credits, in particular two programs: the Child Tax Credit (CTC), which provides for monthly payments; and the Earned Income Tax Credit (EITC), a refundable tax credit for low- and middle-income working individuals and couples, especially those with children, which is claimed when filing a claim. tax return.

One of the conditions to be eligible for the EITC is to have a valid Social Security Number (SSN), to be a US citizen or resident alien; for mixed-status families filing jointly, one of the two filers must be a U.S. citizen or a resident alien in the tax year. This step disqualifies many families who produce Individual Tax Identification Numbers, or ITINs, a common practice among immigrant workers who do not have an SSN. Experts estimate that there are approximately 107,610 children in households reporting ITIN in New York state.

During the pandemic, 10 states adopted or reformulated their EITC to reach more needy workers, and states like California and Colorado have expanded the app to specifically include ITIN reporters, according to Samantha Waxman, policy analyst at the Center on Budget and Policy Priorities (CBPP).

New York has not expanded its state EITC, and legislation that would allow ITIN filers to qualify for the state version of credit has not been passed by the Senate or the Assembly in the past. past two legislative sessions, despite the fact that approximately thousands of these ITIN-reporting families are raising children born in the United States. The Vera Institute found that 87 percent of the 2 million children in New York City with at least one immigrant parent are themselves citizens.

“One may be a practical reason,” says Dorothy (Dede) Hill, director of policy at the Schuyler Center for Analysis and Advocacy. The New York State EITC is a percentage of the federal EITC and follows the same federal eligibility rules, which exclude undocumented families and others who do not qualify for a Social Security number and whose only option is to pay taxes with an ITIN number.

From an administrative standpoint, Hill says, it would be a bit more difficult for the state to extend the EITC to ITIN reporters because it would not comply with federal eligibility rules. But that doesn’t mean it can’t be done, says Hill, since “NY ‘decoupled’ its Empire State Childrens Credit from the Federal Childrens Tax Credit a few years ago. As a result, our state child tax credit is eligible for ITIN filers even though the federal CTC is not available for these filers.

There was an effort to include an expansion of the CLC in New York State’s 2021-2022 budget (Senate Bill S.5866 and Assembly 3146-A) that would have provided up to $ 1,000 for families with children under 4 years old, and $ 500 for children between 4 and 17 years old. None of these bills was put to a vote in the last legislative session in Albany.

“The priority this year was the Excluded Workers Fund,” said State Assembly Member Andrew Hevesi, who sponsored the CTC expansion bill.

New York has taken a big step forward in closing the loopholes created by the federal exclusion of ITIN filers from UI and stimulus payments with the creation of the Exluded Workers Fund (EWF), says David Kallick, director of the Immigration Research Initiative at the Fiscal Policy Institute.

However, the EWF was a mitigation program and does not focus on reducing child poverty. At a September 15 press conference, Roberto Suro and Hannah Findling of the University of Southern California concluded that it would be nearly impossible to achieve historic reductions in child poverty among immigrant families if the barriers bureaucratic issues of the US tax system are unresolved.

To increase the incomes of low wages, 29 states, along with the District of Columbia and Puerto Rico, enacted their own version of the federal EITC, recognizing it as an effective tool to advance equity and reduce child poverty. , especially for people of color, women and immigrants, who are overrepresented in low-paying jobs.

One of the reasons these types of programs are so effective in reducing poverty is that they provide “immediate relief while providing an incentive for work and income,” the authors said in a recent article. New York enacted its own EITC in 1994, directly linking eligibility and credit levels to the federal EITC, and a study of 90 low- and middle-income neighborhoods links it to improvements in health at the individual level in the city. and the state.

Hevesi, chair of the Assembly’s Children and Families Committee, says he’s pushing for an expansion of the CTC but not the EITC, saying there aren’t enough resources for both.

A bicameral set of bills (S537 and A2533) would have included ITIN fillers for the state EITC, but have not been put to a vote in the last two legislative sessions. Similar legislation was introduced in city council in 2020, which asked the state legislature to make state and city versions of credit eligible for ITIN holders, but it also failed to no longer passed.

Spokeswoman for Assembly Member Patricia Fahy, who sponsored the state bill, told City Limits there are plans to reintroduce the legislation in Albany in the next session.

In the meantime, children of New Yorkers who report using the ITIN can only access one of the two main tax programs in place to fight child poverty. Including households reporting ITINs in New York State would have a direct impact on children’s lives, experts say.

According to figures from the Institute on Taxation and Economic Policy, there are 3,515,080 children in households reporting ITINs in the United States. Of these, the majority are children born in the United States, Kallick adds.

“The federal tax code is supposed to ignore immigration status, and tax equality is about ensuring that everyone, regardless of status, who contributes to the system has equal access to tax credits,” Suro said.

City Limits also asked several of the members of the state assembly and senate child and family committees. Only a representative of Senator Roxanne Persaud in the Senate responded, saying that the senator “has no comment at the moment but will raise these questions with the chairman of the committee”.

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