Tax Breaks Expanded For Immigrants Under New California Law
SACRAMENTO, Calif. (AP/CBS13) — California will give tax breaks to more immigrants, including those living in the country illegally, under a new law signed by Gov. Gavin Newsom on Friday.
The earned income tax credit gives cash back to people who have jobs but make so little that they often don't owe any income taxes. The idea is to encourage people to work by promising to boost their pay with a tax credit. People get the money as a refund when they file their taxes each year. Combined with the federal credit, qualifying families can earn up to $8,000.
California has had its own earned income tax credit since 2015. But it was only available to people who had Social Security numbers. That excluded immigrants who paid taxes with an individual taxpayer identification number issued by the IRS.
In June, California expanded its earned income tax credit for the first time to immigrants who have jobs and pay taxes but don't have Social Security numbers. But they were only eligible for the credit if they had a child under 6. The law Newsom signed Friday removes that requirement.
"These Californians are taxpayers and should be treated like taxpayers, eligible for the same credits, and pay the same tax rates," the Democratic governor said.
California has nearly 40 million people and its economy, if it were its own country, would be the fifth-largest in the world. But the state also has the nation's highest poverty rate, according to figures released this week by the U.S. Census Bureau. More than 17% of California households live below the supplemental poverty level — a measure that takes into account things like the cost of housing and child care.
Advocates say the law will help bring people out of poverty.
"Things like the earned income tax credit put real money in people's pocket," said Mike Herald, director of policy advocacy at the Western Center on Law and Poverty.
The law is one of several in California aimed at increasing services for immigrants living in the country illegally. In 2016, California was the first state to offer government-funded health insurance to low-income children regardless of their immigration status. Last year, that was expanded to cover low-income adults 25 and younger in the country illegally.
Republicans have generally opposed these efforts, arguing the state should not spend public money helping people who are not in the U.S. legally.