Without immigration status, Martha Cruz and her family of five would likely be eligible for a working family tax credit that could result in a refund.
However, 40-year-old Cruz from Back of the Yards cannot qualify for the federal or state version of Earned Income Credit because she and her husband each use a unique tax identification number when filing their taxes. They are immigrants and do not have a social security number.
A push to expand the Illinois Earned Income Credit’s eligibility could soon become a reality with two pending bills in the Illinois General Assembly.
The proposed expanded eligibility for the government version of the loan would include immigrants like Cruz who use a tax identification number to file taxes, people 18-24 without children, and people 65 and older with no dependents who meet income requirements.
The invoices also require the inclusion of unpaid carers who have a qualified relative, e.g. B. a child under 6 years of age, a senior citizen or a person with a disability.
The federal and state versions of Earned Income Tax Credit are refundable tax credits that taxpayers use to obtain a refund check. Some individuals who qualify for the loan earn so little that they may not owe taxes on their wages, resulting in a full refund of the loan, said Daniel Rahill, executive director of wealth strategies at Wintrust Wealth Management, who helped applicants the credit while volunteering.
“You could see the power of it,” said Rahill. “This is a really good thing for families. The tax law, if you will, should be used for social change to help the less fortunate, and this is an example of that. ”
For the 2020 tax year, federal credit ranges from $ 538 – for those without children – to $ 6,660 – for those with three or more children, according to the IRS. Additionally, Illinois residents qualify for the federal loan, which is equal to 18% of their federal loan.
The recently signed American Rescue Plan Act lowered the federal loan eligibility age to 19 for the 2021 tax year, Rahill said.
Cruz’s husband makes about $ 30,000 to $ 35,000 a year to support his family, which includes three children. The couple’s oldest child is 19 years old and no longer lives at home. Cruz believes a larger refund could help her family buy a car, pay off debts, or put money into savings.
“Maybe in the future we would have the opportunity to buy a house,” said Cruz in Spanish. “Maybe that’s our wish to have a house of our own.”
Martha Cruz poses for a portrait outside her home in Back of Yards, Tuesday, March 16, 2021. Anthony Vazquez / Sun-Times
Federal Earned Income Tax Credit has been aimed at working families since 1975 and is widely viewed as a poverty reduction program, according to the IRS website.
In Illinois, there were 908,000 earned income tax credit claims as of December, according to the IRS.
Mayor Lori Lightfoot and Illinois Comptroller Susana Mendoza recently announced that they are giving relief to families receiving the credit this year by not withholding money from tax refunds to pay pending fines, parking tickets, or court judgments.
State Senator Elgie Sims, D-Chicago, heads the Senate version of the law. He sees expansion as an instrument to combat poverty and inequality.
The bill is at an early stage in the legislative process.
“I look forward to having conversations about the entire proposal, getting their input and hearing their perspective,” said Sims of potential opponents. “I can tell you now, I’ve only heard positive responses to the proposal.”
Ruby Mendenhall, associate professor at the University of Illinois at Urbana-Champaign, has researched whether it is better to distribute tax credit funds in a lump sum or in incremental payments. She became interested in credit because she sees it as a form of social mobility.
She found that the majority of people used the funds on bills and debts, while a smaller percentage was used on savings. Others also used it to support a child in college.
“You just think about the recession and how hard it was, the housing crisis and how hard it was for people to come back and then COVID,” Mendenhall said. “I would say this is the time to start thinking about how we can cover so many people in a society in need of income support.”
Cruz at Back of the Yards said her husband contracted COVID-19 in April and has been unable to work for about a month. Her husband’s working hours were temporarily reduced in his metal processing. Due to the immigration status, the family was also excluded from all three rounds of state coronavirus aid.
“Especially in these times we live in, many families are going through difficult times,” said Cruz.
Michelle García, an immigration and Latinx community organizer for Access Living, said she had received calls over the past year from people struggling to pay their medications and bills. She sometimes sent some of her own food to families. Access Living, an advocacy group for people with disabilities, is part of a coalition of groups advocating changing tax credit eligibility.
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Michelle García works as the Immigration and Latinx Community Organizer at Access Living.Provided
García said some immigrants with disabilities are already excluded from programs like social security.
“Now with this pandemic, it has really arrived,” said García. “Having this eligibility to qualify for $ 600 credit, be classified as dependent, or if you’re an ITIN filer and have this availability to give back is a huge help.”
The expansion spurt requires a minimum credit of $ 600 for unpaid caregivers, e.g. B. for relatives with disabilities.
Jenna Severson, a spokeswoman for Economic Security for Illinois who advocates for working people, said the push to expand earnings preceded the pandemic. She said the past year has hit women and carers the hardest, as many have had to stay home to take care of children or other dependents.
Illinois Economic Security, working with the Institute for Taxes and Economic Policy, estimates that up to 500,000 households would benefit from the expansion, including 110,000 immigrant households.
Austin-based Johnnetta said she had to quit her job to take care of her 5-year-old daughter, who had cerebral palsy after schools closed last March.
“I didn’t expect it,” said Johnnetta, who asked that her last name not be used for privacy reasons. “I wasn’t prepared for it.”
While her daughter was back in school, she has been sent home a number of times due to COVID guidelines. Feeling like she’s been scraped over the past year, she sees the option of a bigger refund check as a way to stay afloat by paying her bills and buying household items like milk.
Margot Zamora, from Berwyn, had started doing home care services a few hours a day when the pandemic caused her to stop working. She has two children, including a disabled child; Your family is considered a mixed home with different immigration statuses.
Like Johnnetta, Zamora said she would use a refund check to cover essentials for the household including rent and utilities.
Zamora said her family hadn’t received any of the stimulus checks and her husband’s wages had fallen. They survived with pantries and with the help of local groups.
“So far we’ve come with the help of the community,” Zamora said in Spanish. “We helped each other.”
Elvia Malagón’s coverage of social justice and income inequality is made possible by a grant from the Chicago Community Trust.