FOR IMMEDIATE RELEASE: MAY 14, 2020

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Economic Justice Advocates Respond to Governor’s May Revise: Stop Excluding Californians From CalEITC; Critical to COVID-19 Recovery

United Ways of California together with a coalition of 60 organizations make urgent plea, highlight need for outreach to eligible households to access poverty-fighting power of earned income tax credit

(Los Angeles, CA) — In response to the Governor’s May Revision to the proposed 2020-2021 state budget announced today, United Ways of California and a coalition of 60 organizations thank Governor Newsom for continuing the California Earned Income Tax Credit (CalEITC) program, but call out continuing to exclude hundreds of thousands of working taxpayers from anti-poverty tax credits designed to reward work.            

“Now more than ever we need to make California, a California for all,” says Peter Manzo, President and CEO of United Ways of California. “While we applaud the Governor for keeping the CalEITC in the budget, all hard-working, tax-paying Californians regardless of their immigration status deserve equitable treatment, most especially during this pandemic,” Manzo added.

The exclusion of households that include any holder of an Individual Taxpayer Identification Number (ITIN)  not only adversely impacts immigrant households but mixed-status families as well, including U.S.-born children and partners who file with Social Security Numbers. Despite working and paying taxes, these Californians are denied access to the California Earned Income Tax Credit (CalEITC) and Young Child Tax Credit (YCTC), which could significantly mitigate the economic impacts of the COVID-19 crisis. United Ways of California are cofounders of the diverse coalition that worked to establish CalEITC and have advocated that the benefit be made available to all taxpayers regardless of immigration status since the state tax credit was first adopted in 2015.

An upcoming study scheduled for publication next week from a researcher at UC Merced, cites that California immigrants are hardest hit by COVID-19 job losses.  While non-citizens only constitute 11.5 percent of the California population, they represent 22.7 percent of all jobs lost in the state.

United Ways of California understands that we are at an unprecedented moment in history. The decision to exclude Californians who use an Individual Taxpayer Identification Number (ITIN) to contribute to both our federal and state tax base from a critical program that could benefit over 600,000 individuals—including over 244,000 California children—and infuse millions of dollars into our local economies right now shortsighted, especially in a budget the Governor has stated is meant to meet our state’s immediate needs in this unprecedented crisis.  In both times of surplus and deficit, low-income immigrant workers and their families contribute over $3 billion to California’s economic prosperity while simultaneously being economically deprived by a tax system that refuses to acknowledge their contributions. But in times of economic downtown, the decision to withhold a tool proven to yield housing stability, health and wellness benefits, and positive outcomes for preschool and school-age children, is the embodiment of acting upon short-term impulse without considering the long term consequences.

Working families who work and earn the same amount are receiving vastly different support. US-citizen children especially are hurt by this; Nine out of 10 Californian parents who are undocumented live with U.S. citizen children. Undocumented adults constitute nearly one-tenth of the state’s workforce yet are overrepresented in industries that are hardest hit by the economic impacts of COVID-19 (such as restaurant and retail work), and in frontline, essential industries (such as health care and domestic work). Workers who file taxes with an ITIN are excluded from federal relief payments and Unemployment Insurance. This affects immigrant workers and our children: as the Governor and First Partner have made clear, the promise of a California for All must be kept for all of California’s children, regardless of family immigration status.

Key to scaling the impact of CalEITC and YCTC is ensuring eligible workers file their taxes and successfully claim and receive the entirety of the credits. This will only be of greater importance as lost wages and lost jobs ravage the budgets of more Californian households. This is why UWCA is disappointed to see that the minimal funding that historically has supported outreach and education on CalEITC cut in the May Revise. We know well from our Volunteer Income Tax Assitance efforts across the state just how vital reaching eligible families with easy to understand information around tax credits will be as our economy begins to recover.

Time is of the essence, and families who contribute to the sustainability of California, many of whom are essential workers, are in desperate need. The Governor’s revised budget proposal acknowledges that the economic crisis brought on by COVID-19 is sure to be felt for the foreseeable future. The Coronavirus does not care where someone is born or their immigration status, and neither should our response. Immigrant families are feeling the compounded inequities and are watching how our government responds. We must end exclusionary policies now, starting with the CalEITC. It’s one of the most strategic, effective, and equitable ways to create a better California for all of us.

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About United Ways of California

United Ways of California improves the health, education and financial stability of low-income workers and families by enhancing and coordinating the advocacy and community impact work of 31 member United Ways throughout California. For more information about United Ways of California, visit unitedwaysca.org. To find a local United Way near you visit unitedwaysca.org/find-united-way. For a complete list of United Ways in California please visit unitedway.org/local/united-states/california.