Newsom extends tax credit access

SACRAMENTO » Gov. Gavin Newsom today signed AB 1876, further expanding access to the California Earned Income Tax Credit (CALEITC) to ensure all California tax filers, specifically undocumented ITIN filers who are otherwise eligible, may qualify for the CALEITC and the Young Child Tax Credit (YCTC).

In 2019, the Administration more than doubled the CALEITC and the YCTC from $400 million to $1 billion and in the 2020-21 State Budget, expanded eligibility to undocumented ITIN filers with children five and under. An estimated two in three of eligible workers under this new expansion are essential workers — including workers in restaurants, grocery stores and the farm industry.

“The COVID-19 pandemic

has hit California families hard — especially families of color who were already disproportionately impacted by the ongoing affordability crisis. Undocumented front line workers leave their families every day to keep our economy running, but many are still struggling to make ends meet,” said Newsom. “Expanding the CALEITC will provide a critical boost to undocumented and mixedstatus families across the state, stimulate the economy and make us all stronger in the face of economic uncertainty. These Californians are taxpayers and should be treated like taxpayers, eligible for the same credits, and pay the same tax rates.”

The COVID-19 recession has not only dealt a swift and broad-based blow to California’s economy — it has taken a disproportionate toll on low-income Californians of color, worsening income disparities that predate the pandemic. In the first two months of the COVID-19 recession, the majority of jobs lost were in low-paying industries. An estimated 289,059 undocumented Californians lost their jobs due to the pandemic. Among those most severely impacted, immigrant women have lost their jobs at a disproportionate rate.

The expansion of the CALEITC and the creation of the YCTC have provided muchneeded financial relief to millions of Californians, especially families with young children. Additionally, on April 15, 2020, Governor Newsom announced a first-in-the-nation statewide public-private partnership to provide disaster relief assistance for undocumented Californians. California’s $75 million investment reached 150,000 people across the state and the privately funded Immigrant Resilience Fund, managed by Grantmakers Concerned with Immigrants and Refugees (GCIR), has brought in over $42 million of the $50 million goal to date, and has disbursed $37.4 million to eight regions.

AB 1876, a budget trailer bill, removes the requirement for an ITIN tax filer to have at least one child under the age of six to qualify for the CALEITC. The requirement will no longer apply in each taxable year beginning on or after Jan. 1, 2020. 97 percent of children who will benefit are children of color, and 90 percent are Latino. Today’s step to build a more equitable CALEITC comes as California celebrates Latino Heritage Month and the 15 million Latinos who call California home — a diverse group with roots throughout Latin America and beyond, Latino Californians also trace their heritage to the original Indigenous communities of Latin America and Africa.

“The CALEITC is a powerful tool to help uplift hardworking families across this state,” said First Partner Jennifer Siebel Newsom. “I am proud the Governor is signing this critical piece of legislation to ensure this transformative benefit reaches even more families.”

“We know that immigrant workers have been disproportionately devastated by our current public health and economic crises. These tax-paying, essential workers continue to be shamefully and systematically left out of federal relief efforts,” said Assemblymember Lorena Gonzalez (D-san Diego), Chair of the California Latino Legislative Caucus. “Today’s signing of AB 1876 reflects our inclusive California values and provides tax equity to all our residents, including tax-filing undocumented workers. For years, the Latino Caucus has been fighting for this expansion of the California Earned Income Tax Credit to ITIN filers as it provides a critical safety-net for our lowest paid working families. We thank Governor Newsom for seeing these essential workers in their entirety, for the human beings and full California residents that they are.”

“The United Way has called the EITC a widely recognized and effective antipoverty program for proworking families. Immigrants in California are the backbone of our economy.