New push to expand the state’s earned income credit could include immigrants


Without immigration status, Martha Cruz and her family of five would likely qualify for a working family tax credit that could result in a refund.

But Cruz, 40, of Back of the Yards, won’t be eligible for federal or state versions of the Earned Income Credit because she and her husband each use an individual tax number when they file their taxes. They are immigrants and do not have a social security number.

A push to expand Illinois earned income credit eligibility may soon come true thanks to two bills pending in the Illinois General Assembly.

The proposed expanded eligibility for the state’s version of the credit would include immigrants like Cruz who use a taxpayer identification number to file their taxes, people 18 to 24 without children, and people 65 and over. without dependents who meet income requirements.

The bills also plan to include unpaid caregivers who have an eligible dependent, such as a child under the age of 6, a senior or a person with a disability.

The federal and state versions of the earned income tax credit are refundable tax credits that provide taxpayers with a refund check. Some people eligible for the loan earn so little that they may not owe taxes on their paycheck, resulting in a refund of the entire loan, said Daniel Rahill, Managing Director of Wealth Strategies at Wintrust Wealth Management, who helped people apply for credit while volunteering.

“You could see the power of it,” Rahill said. “It’s a very good thing for families. Tax law should be used, if you will, for societal change by helping the less fortunate, and this is one example. ”

For the 2020 tax year, the federal credit ranges from $ 538 – for those without children – to $ 6,660 – for those with three or more children, according to the IRS. On top of that, Illinois residents are also eligible for state credit, equal to 18% of their federal credit.

The recently signed American Rescue Plan Act lowered the age of federal credit eligibility to 19 for the 2021 tax year, Rahill said.

Cruz’s husband earns around $ 30,000 to $ 35,000 a year to help support their family, which includes three children. The couple’s eldest child is 19 and no longer lives at home. Cruz thinks that a larger repayment could help his family buy a car, pay off debts, or save.

“Maybe in the future we would have the option of buying a house,” Cruz said in Spanish. “Maybe it’s our wish to have our own house.”

Martha Cruz poses for a portrait outside her home in Back of Yards on Tuesday, March 16, 2021.
Anthony Vázquez / Sun-Times

Since 1975, the federal income tax credit has targeted working families and is widely viewed as an anti-poverty program, according to the IRS website.

In Illinois, there were 908,000 earned income tax credit claims in December, according to the IRS.

Mayor Lori Lightfoot and Illinois Comptroller Susana Mendoza recently announced that they are offering relief this year to families receiving the credit by not withholding money from tax refunds to pay traffic fines, parking tickets or court rulings.

State Senator Elgie Sims, D-Chicago, is leading the Senate version of the bill. He sees expansion as a tool to fight poverty and inequality.

The bill is in the early stages of the legislative process.

“I look forward to having conversations about the whole proposal and getting their advice and hearing their perspective,” Sims said of potential opponents. “I can tell you right away that I have only heard positive responses to the proposal.”

Ruby Mendenhall, associate professor at the University of Illinois at Urbana-Champaign, conducted research to determine whether it is better to distribute the tax credit funds in a lump sum or in installments. She was interested in credit because she sees it as a form of social mobility.

She found that a majority of people used the funds for bills and debts, while a smaller percentage was spent on savings. Others have also used it to support a child in college.

“You just think of the recession and how hard it is, the housing crisis and how hard it is for people to come back and then COVID,” Mendenhall said. “I would say now is the time to think about how we cover so many people in a society that needs income support.”

Cruz, of Back of the Yards, said her husband contracted COVID-19 in April and was unable to work for about a month. Her husband’s hours were temporarily reduced to his metalworking job. And due to immigration status, the family has also been excluded from the three rounds of federal coronavirus aid.

“Especially in these times that we live in, I think a lot of families are going through tough times,” said Cruz.

Michelle García, immigration and Latinx community organizer for Access Living, said she had received calls from people over the past year who were struggling to pay their medications and bills. She sometimes sends some of her own food to families. Access Living, an advocacy organization for people with disabilities, is part of a coalition of groups lobbying for changes in eligibility for the tax credit.

Michelle García works as a community immigration and Latinx organizer with Access Living.

García said some immigrants with disabilities are already excluded from programs like social security.

“Now with this pandemic it has really struck home,” García said. “Having that eligibility to be entitled to something like a $ 600 credit, to be charged or if you’re an ITIN filer, to have that availability to have something in a return is a huge help.”

The expansion push requires a credit of at least $ 600 from unpaid caregivers such as those with disabled dependents.

Jenna Severson, spokesperson for Economic Security for Illinois, which advocates for workers’ rights, said the push to extend credit for earned income predates the pandemic. She said the past year had hit women and caregivers the hardest, with many having to stay home to care for children or other dependents.

Economic Security for Illinois, in conjunction with the Institute in Taxation and Economic Policy, estimates that up to 500,000 households would benefit from the expansion, including 110,000 immigrant households.

Johnnetta, from Austin, said she had to quit her job to care for her 5-year-old daughter, who has cerebral palsy, after schools closed last March.

“I didn’t expect this to happen,” said Johnnetta, who asked that her last name not be used for confidentiality reasons. “I was not prepared for this.”

While her daughter has returned to school, she has already been sent home several times due to COVID guidelines. She feels like she’s been scratched over the past year and sees the possibility of a bigger refund check as a way to keep herself afloat by paying her bills and buying essential household items like milk. .

Margot Zamora, from Berwyn, had started working a few hours a day doing home care services when the pandemic forced her to stop working. She has two children, including a disabled child; her family is considered a mixed-status household with various immigration statuses.

Like Johnnetta, Zamora said she would use a refund check to pay for essential household items, including rent and utilities.

Zamora said her family had not received any of the stimulus checks and her husband’s salary had gone down. They survived using pantries and with the help of local groups.

“This is how we have succeeded so far with the help of the community,” Zamora said in Spanish. “We helped each other. ”

Elvia Malagón’s reporting on social justice and income inequality is made possible by a grant from the Chicago Community Trust.

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