Opinion: Immigration Status Should Not Be a Barrier to Working Family Tax Credits

Tax Credits
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Most Marylanders would agree economic supports should be available to all who need them.

Seeing so many of our neighbors in need of additional financial assistance to continue to weather the COVID-19 pandemic, state leaders smartly looked to maximize one of our most powerful anti-poverty tools, the Earned Income Tax Credit.

The expansion of the EITC and direct assistance payments to EITC recipients who were part of the just-passed state RELIEF Act will help hundreds of thousands of Marylanders put food on the table or catch up on rent or utility bills and put millions of dollars into local economies.

Unfortunately, without additional action, one group of low-income taxpayers will still be left without help.

Discriminatory federal rules mean people who work and pay taxes using an individual taxpayer identification number are excluded from virtually all public assistance programs, including SNAP and Medicaid, even if they would otherwise qualify based on having a low income. These Marylanders also cannot receive unemployment or federal stimulus checks.

When it comes to working family tax credits like the EITC, the entire household can be ineligible for this powerful poverty-reducing tax credit if one person has an ITIN, even if the other members of the family are U.S. citizens. These are our neighbors and essential workers, and they need help now.

Immigration law is complex, and its interaction with tax law adds another layer of complexity. Someone using an ITIN could be at various points in the immigration process and can come from many places — most commonly Africa, Asia, Eastern Europe and Latin America. Getting an ITIN takes time and resources, and those who go through the process do so to demonstrate their commitment to contributing to their communities.

Regardless of their immigration status, the more than 80,000 Marylanders who use ITINs and pay an estimated $332 million in taxes annually should be eligible for the same tax credits as any other Maryland taxpayer. States across the country are starting to recognize the harm and reject this discriminatory federal policy. Colorado and California recently expanded their EITCs to include ITIN holders and several other states are considering similar legislation.

Working family tax credits like the EITC have a long history of increasing economic security for low-income households. Getting a little more money back at tax time helps Marylanders meet their basic needs or cover larger one-time expenses, like car repairs or medical expenses.

Because it reduces poverty, research also links the EITC to a wide range of benefits, particularly for children growing up in households who receive the EITC, including improved health and completing higher levels of education.

These economic supports are more critical than ever as Maryland families recover from the pandemic. Maryland should not continue to uphold discriminatory federal policies and should include all low-income Maryland taxpayers in the EITC.

— ROBIN MCKINNEY AND BENJAMIN ORR

The writers are, respectively, CEO of The CASH Campaign of Maryland and president and CEO of the Maryland Center on Economic Policy.