Why Latino leaders say California should offer tax breaks for undocumented families

Democrats’ latest budget plan in Sacramento includes two tax breaks for undocumented families and health coverage for older immigrants, regardless of their immigration status.

“We must do what we can to provide more substantial financial assistance ... to Latinos in California that have been left out of our COVID response,” Sen. María Elena Durazo, D-Los Angeles, said in a statement.

The proposed plan reached Wednesday by California Democrats would allow tax filers with Individual Taxpayer Identification Numbers with at least one child, ages 6 or under, to access the Earned Income Tax Credit and the Young Child Tax Credit programs.

The Internal Revenue Service issues Individual Taxpayer Identification Numbers to those who don’t qualify for Social Security Numbers to help them comply with U.S. tax laws. Individual Taxpayer Identification Numbers do not provide Social Security benefits or qualify dependents to receive the Earned Income Tax Credit benefits.

The Medi-Cal expansion, which was included In Gov. Gain Newsom’s January budget, would provide medical coverage to undocumented seniors, ages 65 or older.

The Medi-Cal expansion’s start date would not begin until January 2022 and the governor has the authority to delay its launch based on the budget’s ability to afford the cost.

Undocumented immigrants who work and file taxes are not eligible for federal stimulus relief or unemployment insurance, according to Sasha Feldstein, an economic justice policy manager at the California Immigrant Policy Center. The tax breaks, she said, would act as a “critical resource” for families.

“As essential workers, immigrant communities have been affected the most by the COVID-19 economic shutdown,” Durazo said.

Latinos and black Americans are among the hardest-hit by the virus. California Latinos make up nearly 39% of the state population, according to data from the California Department of Health, yet account for more than half (54.2%) of the state’s COVID-19 cases.

In order for the expansions to be added to the final budget, a vote must take place between both houses of the Legislature and requires Newsom’s approval, as the June 15 deadline looms.

Assemblywoman Lorena Gonzalez, D-San Diego, said in a Wednesday press release that it was “paramount” for Newsom to approve the program’s expansions.

“I’m really excited that we were able to get agreement from both the Senate and the Assembly,” Gonzalez, who chairs the California Latino Caucus, told The Sacramento Bee. “The Latino Caucus worked really hard on these two issues. So it’s not everything we asked for but it is definitely progress.”

For Feldstein, it’s a good start.

“We of course would want to make sure all ITIN filers are included, not just people with a child under six. Because these are all households that are working, are filing their taxes and are being really hard hit by the COVID-19 crisis,” she said.

The current budget faces an estimated $54 billion deficit prompted by the coronavirus pandemic that has killed over 4,400 Californians and infected nearly 123,000, according to data from Johns Hopkins University and The COVID Tracking Project.

The California Immigrant Policy Center, Feldstein said, has been advocating for those with Individual Taxpayer Identification Numbers to get the California Earned Income Tax Credit for years. And while a tax break proposal for Individual Taxpayer Identification Number filers was included in last year’s Senate and Assembly budget proposals, it did not make it to the final budget.

It was disappointing, she said, because had it been included those who filed their taxes with an Individual Tax Identification Number last year could have benefited from the tax credit this year, when financial resources are needed now more than ever due to the pandemic’s toll on the economy and employment rates.

The Medi-Cal and tax credit expansion comes weeks after Newsom announced a first-in-the-nation plan to provide COVID-19 relief to the state’s undocumented immigrants, who he said make up 10% of the state’s workforce.

This story was originally published June 8, 2020 at 5:00 AM with the headline "Why Latino leaders say California should offer tax breaks for undocumented families."