June 21, 2024 | Vol. 53, Issue 12

The only bilingual Chinese-English Newspaper in New England

Sometimes Hard Work is Not Enough: So Expand Earned-Income Tax Credit

The Earned-Income Tax Credit has been widely hailed as one the most successful antipoverty programs in the country, and it’s time our state allowed immigrants without Social Security numbers to benefit from the credit, too.


The EITC is aimed at boosting the incomes of low-to-moderate earners, especially those with minor children. There is a rich body of research showing how the EITC lifts millions of households out of poverty and encourages employment. Massachusetts is among the 31 states that have their own version of the EITC, building upon the federal benefit. This credit is so important that the IRS sponsors EITC Awareness Day every tax season to ensure the word gets out to workers who might miss out if they don’t file their tax returns.


Despite the massive success of the EITC, too many otherwise income-eligible immigrant households are shut out simply because they file their tax returns with an Individual Taxpayer Identification Number (ITIN) rather than a Social Security number. Ten states and the District of Columbia have reformed their tax codes to include ITIN filers, remedying this tax injustice. Will Massachusetts be next? Maybe – but only if more people keep asking the State House to fix this problem.


Immigrant ITIN filers pay billions of dollars in taxes year after year nationwide. Immigrant workers and business owners are essential to our national and local economies. In Massachusetts, a quarter of our workforce is foreign born and 220,000 lack Social Security numbers. Every year we help immigrants apply for ITINs at Greater Boston Legal Services and every year we see tax returns that could be generating thousands of dollars in refunds for hardworking families end up with tax debt, just because of the tax id number on the return.


Working immigrant taxpayers who are ineligible for Social Security numbers are still required to file tax returns and the IRS issues these alternative tax identification numbers – ITINs – so that they may comply with their tax obligations. While the tax obligations of an ITIN filer household are the same as those with Social Security numbers, their access to tax credits is not. We think this is unfair and we are not alone. The Healthy Families Tax Credit Coalition (HFTC) is a statewide network of advocates working to improve the well-being of Massachusetts families and children by expanding the state EITC. The Massachusetts Budget and Policy Center, which is part of this coalition, released a report this year correctly calling the exclusion a “tax penalty” for these families and estimating the expansion would reach up to 76,000 individuals at a cost of up to $28 million. This is doable. The tax system is a critical part of the safety net and those of us who want to work against poverty must encourage our lawmakers to do what’s right.


We shouldn’t base our tax policy upon a broken immigration system. There has been no meaningful immigration reform since 1986. Even when the system works as intended, it is arbitrary, slow, and full of dead-ends. Many immigrants who eventually gain lawful documented status have faced long delays preventing them from obtaining Social Security numbers for years. This broken system results in many mixed-status households where some members have Social Security numbers and others do not. Meanwhile, these immigrants are not only working but they are raising their families and becoming integral members of our communities. In fact, most of those hurt by the EITC ITIN exclusion are U.S. born children in these households.


I often tell my clients that the IRS does not care if you have a work permit, they care if you work. Even if my client is paid under an unregistered Social Security number – thus joining the thousands of undocumented workers who contribute billions to a Social Security system they might never be able to access as seniors – the IRS will nevertheless issue the alternative tax ID number, accepting their W2 form as proof of their earnings and tax withholdings. If these workers are obliged to comply with tax laws, why not allow them the tax credits they have earned, too?


The story of my family, and I am sure of many of those reading this, is an immigrant journey and part of the great immigrant history of this country: We came seeking a safer, better life, and we believed that by working hard we could grasp some piece of the American dream. The EITC helps families who are still struggling despite working and addresses the gap between low wages and basic needs. Massachusetts is an expensive place to raise a family. The EITC makes it a little easier for hardworking people who are still poor. Excluding some families on the basis of their immigration status rather than their income needlessly reduces the statewide impact of the EITC. Modest changes in the tax code can make a huge difference in people’s lives.


Last fall, the commonwealth of Massachusetts passed the biggest state tax reform in 20 years. We expanded our state EITC from 30% to 40% of the federal credit but did not include ITIN filers. That was a mistake. The state budget is now being developed and a group of lawmakers filed amendments that would have expanded the EITC to ITIN filers, amendments which garnered a significant number of co-sponsors, but which ultimately failed. It is important to note that immigrants without Social Security numbers are eligible for the state Child and Family Credit (which affords $310 per child under 13 and certain disabled dependents and spouses, regardless of the household’s income or immigration status), so why not the EITC? If more people understand what is at stake and make this issue a priority with their legislators, then we will celebrate the next legislative session for recognizing immigrant workers as the taxpayers they are.


We should join California, Colorado, Illinois, Maine, Maryland, Minnesota, New Mexico, Oregon, Vermont, Washington, and Washington, D.C. which have broken with federal eligibility rules and expanded their EITCs to their ITIN holder residents. Only by leaving no worker behind can we realize the full potential and promise of the EITC and achieve an economy that works for all of us.


The tax system might be complicated, but promoting tax credits for working families is not.

Related articles

AACA gears up for expansion of job training in Metro-North

During times of relative prosperity, such as when the unemployment rate was at a recent historic low of 3.5 percent, it is easy for some to ignore the plight of those that are homeless, unemployed, or even underemployed and stuck in a dead end job. Dismissing these individuals by telling them to pull themselves up by their own bootstraps and get a job fails to acknowledge the dirty truth. Existing workforce development systems do not play in the favor of […]

Narcan Approved for Over the Counter Sales:  Ending the National Overdose Crisis?

 “I will say that I have done many things I am proud of as a doctor, but one of the things that I am proudest of is just happening to be a person carrying Narcan when another person is literally dying on the sidewalk. I was able to give them Narcan, they survived it, and came back to life. It was not because I was a doctor, but because I was carrying Narcan.” Dr Joe Wright, Boston Healthcare for the […]

Leave a Reply

Your email address will not be published. Required fields are marked *

404 Not Found

404 Not Found


nginx/1.18.0 (Ubuntu)