After Debate, House Approves Relief for Tax-Paying Immigrants

A view of the Maryland State House from Lawyers' Mall. Photo by Bruce DePuyt.

After another round of intense partisan debate and failed Republican amendments Friday, the Maryland House of Delegates approved a proposal to extend relief to thousands of tax-paying immigrants.

If it’s signed into law by Gov. Lawrence J. Hogan Jr. (R), Senate Bill 218 would expand the Earned Income Tax Credit to people who pay taxes using individual taxpayer identification numbers for the 2020, 2021 and 2022 tax years. That group of taxpayers, which includes undocumented immigrants, certain survivors of domestic violence and student-visa holders, have been excluded from previous state and federal aid.

The bill will also include a child tax credit for people who make a federal adjusted gross income of $6,000 or less and have dependents with disabilities under the age of 17. That tax credit is equal to $500 for each eligible dependent.

The bill was originally introduced by Sen. Nancy J. King (D-Montgomery) as a child tax credit bill, but was amended in the Senate to expand the EITC to ITIN filers after an attempt to do so in the billion-dollar RELIEF Act faltered.

The emergency proposal’s speedy passage through both the House and Senate came after promises by Senate President Bill Ferguson (D-Baltimore City) and House Speaker Adrienne A. Jones (D-Baltimore County) to provide relief for ITIN holders in the state.

Del. Julie Palakovich Carr (D-Montgomery), the lead sponsor of the House version of the bill, said earlier this week that more than 86,000 ITIN filers paid more than $100 million in state and local taxes last year.

Before the bill received the House’s final approval in a 91-44 vote, Democratic lawmakers emphasized that many ITIN filers are essential workers who’ve been without aid throughout the pandemic.

“This is the right step, this is the right move, and this is the right way that we recognize the contributions of people who quite frankly have been paying into the pot,” Del. Gabriel Acevero (D-Montgomery) said, adding that he was once an ITIN filer.

“When you pay into the pot, you should be able to get something from it,” he said.

Del. Jheanelle K. Wilkins (D-Montgomery), said her own family has had various immigration statuses since they immigrated to the United States from Jamaica when she was 5, but added that they’ve always paid their taxes. She noted that immigrant communities have been disproportionately impacted by the pandemic across the United States.

“One thing about COVID-19 is that it doesn’t recognize boundaries,” she said. “It also does not recognize immigration status.”

Wilkins went on to tell the story of one of her constituents, Lashana, who came to the United States in 2015. Lashana, a member of the group CASA, has been paying taxes with an ITIN number since 2015, according to the immigrant rights group, but lost work during the pandemic. She and her 4-year-old son were forced to move into a shared living space with another family – but haven’t been able to pay rent for several months due to lost income.

In an interview with Maryland Matters last week, Lashana, a 37-year-old White Oak resident, said relief money from the state would go toward helping her son.

“It will help us to help our kids,” she said.

Republicans attempt last-minute amendments

Republicans renewed their objections to the bill, arguing that the proposal would incentivize undocumented immigration to Maryland.

“This bill is rewarding people who have broken our law,” Minority Whip Kathy Szeliga (D-Baltimore County) said.

The EITC expansions’ fast track through the legislature has been met with frequent complaints from Republicans, who object to extending the tax credit to undocumented immigrants. Senate Republicans unsuccessfully tried to remove ITIN filers from the bill, and on Friday House Republicans attempted to tack on additional amendments that would’ve significantly changed the proposal.

One of those proposals, introduced by Del. Brenda J. Thiam (R-Washington) would’ve required that the EITC only be extended to taxpayers of “lawful status in the United States.” Thiam and other House Republicans argued that, by extending the EITC to undocumented immigrants, the legislature is “incentivizing breaking the law.”

“We are a nation of immigrants, but we are also a nation of laws,” Thiam said.

Thiam also said there are claims that Republicans have a “dislike or even hatred for immigrants or people who are not American.” She pushed back on that statement, and noted that her own husband immigrated to the United States from Guinea in West Africa.

Her amendment would’ve also expanded the child tax credit. Thiam, an expert in special education, also wanted to expand the maximum age for the child tax credit to 21 because some people with disabilities remain dependent on their parents after they turn 18.

Thiam’s proposal was rejected in a 48-91 vote.

Another amendment, introduced by Del. Robin L. Grammer Jr. (R-Baltimore County) would’ve slashed all state taxes on retirement income. Grammer argued that, instead of giving tax relief to ITIN filers, the legislators should be focused on cutting back taxes for retirees.

“What have we done who are in the least economically productive time in their lives?” Grammer asked before charging that the legislature isn’t doing enough to help retirees in the state.

House Majority Leader Eric G. Luedtke (D-Montgomery) pushed back on the amendment, noting that eliminating taxes on retirement income would cost the state hundreds of millions of dollars. He said such a proposal should be weighed in the House Ways and Means Committee, rather than be included in a last-minute addition. That amendment was voted down 53-86.

Del. Jesse T. Pippy (R-Frederick) sought to ban EITC refunds to inmates, citing an alleged billion-dollar unemployment fraud scheme by inmates in California, but Palakovich Carr said inmates are already banned from receiving those refunds under federal law. That amendment was also rejected in a 47-91 vote.

And a final amendment by Del. Sid A. Saab (R-Anne Arundel) would’ve required that EITC refunds to ITIN filers be sent via physical checks instead of electronic payments. Saab argued that paper checks are more secure than direct deposits, but Palakovich Carr warned that such a proposal would mean more cost to the state. Republicans, however, insisted that the additional cost would be worth the added security.

“Preventing fraud will far outweigh whatever the cost is to mailing a check,” Del. Lauren C. Arikan (R-Harford), said.

Del. Kumar P. Barve (D-Montgomery County) pushed back on the proposal, arguing that direct deposits are both more secure and an easier way for taxpayers to get their refunds.

“Paper checks are so 20th century,” Barve said.

That proposal was rejected in a 46-88 vote, paving the way for the EITC expansion’s final passage by the House. The bill now depends on Hogan’s signature for final approval.

Franchot celebrates bills passage, urges broader relief

Comptroller Peter V.R. Franchot (D) lauded the bill’s passage. He told Maryland Matters in a Friday interview that ITIN filers should consult with an organization like CASA or the CASH Campaign of Maryland to learn how they can receive the EITC refund.

Franchot, who pushed for ITIN filers to be included in the original RELIEF Act, again emphasized that the relief would go to tax-paying residents who’ve been left out of previous government aid programs.

“They’re human beings,” Franchot said of ITIN filers. “They work in Maryland, they pay Maryland taxes and local taxes. They’re good citizens. And we should not leave them behind in the pandemic.”

But Franchot thinks the legislature can do even more to provide relief for low-to-moderate income Marylanders. He warned that, while the EITC is an effective anti-poverty program, it is also underutilized. He described the tax credit as a “document-rich” program that requires filers to fill out various forms, and that many taxpayers might not know that they qualify for it.

“There are tens of thousands of families with small children that are eligible to be part of the EITC. These are not the ITIN holders these are just people that are either not aware or don’t file for the EITC. We have their tax returns, we know they’re eligible, and we know that they’re suffering right now.”

Franchot said the legislature should reexamine sending out larger one-time payments to an even larger group of taxpayers. He has repeatedly suggest using state reserves to send out $2,000 checks to a broader group of Marylanders in addition to the RELIEF Act’s $300 and $500 payments to individuals and families who received the EITC in 2019.

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