*Practice limited to federal immigration law. Licensed in NY, MA, but not in CA.

Advocacy Groups are Pushing for Tax Law Reforms to Help Low and Middle Income Immigrants in California

According to reporting from The San Diego Union-Tribune, the California Immigrant Policy Center (CIPC) is among a coalition of advocacy groups that are pushing for reforms of California’s state tax laws. 

Under the current tax rules, immigrants—simply because of their immigration status—are excluded from a state-based tax credit. Here, our Los Angeles immigration law attorney explains the de facto tax penalty that immigrants are currently forced to pay under California law. 

California Earned Income Tax Credit (CalEITC): Explained

As described by the State of California Franchise Tax Board, CalEITC—the California Earned Income Tax Credit—is a refundable cash based credit that is available to working people in the state who make a low to moderate income. There are a number of different requirements that a California resident must satisfy in order to qualify for the tax credit. Among other things, taxpayers must have a valid Social Security number. In other words, immigrants who are authorized to work with an Identification Number (ITIN) are not eligible to recover tax benefits through this program 

Understanding How California’s Tax Penalty Impacts Working Immigrants

The San Diego Union-Tribune profiles the story of an immigrant named Rosalba Hernandez. Originally from Mexico, Ms. Hernandez has four children—all of whom are native born American citizens. Working in the town of Pleasanton as a housekeeper, she earns an income that would otherwise make her eligible for tax credits through CalEITC. However, because of her immigration status, Ms. Hernandez is currently excluded from this program and, despite her modest income, denied any of the available tax benefits. 

CIPC is Pushing for Tax Fairness for Immigrants

Based on research conducted by CIPC, as many as 600,000 immigrants in California who would otherwise be eligible for tax benefits through CalEITC are not able to obtain benefits based on their immigration status. The advocacy group is pushing California Governor Gavin Newsom to include the tax credit reform proposal in next year’s budget. 

In its report on the issue, CIPC provides an illustrative analysis of how state and federal tax policies produce significant disparities in after-tax income among citizens and immigrants who make about the same amount of money on a pre-tax basis. 

As an example, consider the situation of an undocumented immigrant California mother who has two children and who makes the state minimum wage. According to the CIPC study, this undocumented immigrant mother would make approximately 40 percent less money after tax than would an American citizen in the same financial circumstances. That is a truly stunning gap that shows just how much the deck is stacked against low income immigrants.  

Call Our California Immigration Lawyer for Immediate Assistance

At the Goldstein Immigration Lawyers, we handle the full range of immigration law matters. To arrange a strictly confidential case evaluation, please call us right away at (213) 262-2000. We have a law office in Los Angeles and we represent throughout Southern California, including in Beverly Hills, Burbank, Hawthrone, Rosemead, Long Beach, and Torrance.