Newsom Signs Bill Expanding Tax Credits to Undocumented Workers

While many undocumented immigrants pay taxes, they have been unable to get any tax benefits until now. That's changing thanks to a bill signed by Gov. Gavin Newsom Friday.

AB 1876 will extend tax breaks aimed at helping low-income individuals and families to those who file taxes with an Individual Taxpayer Identification Number (ITIN) instead of a social security number.

It’s part of recent push by Democratic lawmakers to allow undocumented Californians to access the state’s Earned Income Tax Credit (CalEITC).

“Expanding the CalEITC will provide a critical boost to undocumented and mixed-status families across the state, stimulate the economy and make us all stronger in the face of economic uncertainty,” Newsom said. “These Californians are taxpayers and should be treated like taxpayers, eligible for the same credits, and pay the same tax rates.”

Earlier this summer, the Legislature extended some tax benefits to poor undocumented families with young children. With Newsom’s signature, individuals and families with children over the age of 6 who make less than $30,000 a year are now eligible for tax credits.

In 2019, CalEITC provided earners under $30,000 a tax break of up to $240 for an individual and up to $2,982 for a family with three or more children. 

Undocumented immigrants are ineligible for unemployment benefits and other federally-funded relief. In April, Newsom approved one-time payments of $500 to immigrants who lost work due to the coronavirus.

Advocates cheered Newsom’s signature on the measure, noting that immigrant workers are more likely to work low-wage, essential jobs and have borne the brunt of layoffs since the start of the pandemic.

David Huerta, president of United Service Workers West, said the measure “will help so many Californians meet their basic, urgent needs.”

“In a dark and threatening time, California’s community of immigrants, immigrant rights advocates, and unions asked our elected leaders to step up and shine the light of inclusion and humanity in California. Today, with the Governor’s signature on AB 1876, they did just that,” he said. 

Asm. Lorena Gonzales, who chairs the Legislature’s Latino Caucus, applauded the governor’s signature on the bill. 

“We know that immigrant workers have been disproportionately devastated by our current public health and economic crises,” she said. “These tax-paying, essential workers continue to be shamefully and systematically left out of federal relief efforts.”

But California isn’t the first state to extend tax benefits to undocumented taxpayers. Colorado approved a similar measure earlier this year.