Empowering Immigrant Tax Filers for a Stronger Community

Tiffany E. Browne

National Hispanic Heritage Month is an essential moment to shed light on the significant influence Hispanic and Latino Americans have made on our nation. The month-long celebration commemorates more than the community’s cultural richness that has influenced and shaped the U.S. at large. It is also a time to recognize, acknowledge, and amplify the contributions of more than 63 million Hispanic and Latino individuals in the United States.

Immigrant tax filers of Hispanic and Latino descent have played and continue to play a vital role in bolstering our nation’s economy and communities. However, vital tax credits like the Earned Income Tax Credit (EITC) aren’t available to immigrant taxpayers who file using an Individual Taxpayer Identification Number (ITIN). Making the EITC fully available to ITIN filers is an essential step in recognizing the tax contributions of the immigrant communities in the U.S.

Significant Contributions Made by Immigrant Tax Filers

In 2019, Hispanic households contributed $309 billion in taxes. Immigrant filers contribute equally to our tax system by paying a federal income tax, social security tax, Medicare tax, property tax, and more. A recent report notes that in 2019 immigrants in the U.S. contributed $330.7 billion in federal income taxes, and $492 billion in state, municipal, and sales taxes. These tax contributions play a crucial role in funding both federal and state services that provide benefits to communities across the nation.

Current Tax Credit Policies and The Importance of Expanding CTC and EITC Eligibility

The EITC is a refundable tax credit aimed at supporting low-to-moderate-income working individuals and families. The EITC is a powerful tool designed to uplift families and provide them with the means to achieve financial stability.  But requiring EITC claimants to have a Social Security Number prevents many immigrant families from accessing the credit. Not only does this exacerbate financial challenges, but it also hinders families’ integration into society. Currently, eight states– California, Colorado, Maryland, New Mexico, Washington, Maine, and Oregon, and the District of Columbia, have allowed ITIN filers to become fully eligible for the EITC. These states recognize the contributions of immigrant families to their local economies and understand the importance of supporting them.

Tax credit policies contribute to building stronger communities and can improve the financial well-being of immigrant families. Ensuring that eligible immigrant tax filers claim the EITC reduces their tax burden and puts money directly into their pockets. This additional income often serves as a springboard, allowing families to invest in education, housing, and other essentials that nurture their well-being.

While eligibility is the first step towards inclusive tax credit policies, it’s essential to acknowledge that the process of claiming tax credits can sometimes be complex and intimidating, especially for members of immigrant communities who may grapple with language barriers or limited familiarity with the U.S. tax system. To fully realize the potential of these tax credits, community organizations, local leaders, and volunteers can play a pivotal role in ensuring that eligible immigrant tax filers understand their rights and are guided through the filing process with ease.

The positive effects of this support extend well beyond individual families. When immigrant families are empowered with additional financial resources, they infuse vitality into their local economies. From neighborhood businesses to community programs, these families become essential contributors, stimulating economic growth and revitalization in areas that might otherwise be overlooked.

By advocating for accessible information, promoting awareness, and advocating for the federal expansion of the EITC for immigrant tax filers, we sow the seeds for a more resilient, prosperous, and inclusive society.