March 2, 2021
California just passed a historic stimulus package that will inject much needed resources into communities most heavily affected by the COVID-19 pandemic. United Way Bay Area has been tracking the stimulus negotiations and we are encouraged about a key element that’s targeted to the most low-income Californians.
The Golden State Stimulus will make direct cash payments of $600 to anyone who qualified for the California Earned Income Tax Credit (CalEITC) in 2020. Additionally, the stimulus allows those who file with Individual Tax Identification Numbers (ITIN) and are newly eligible for the credit this year, a chance to claim this payment as well. This is great news and we’re encouraged that the state is working to prioritize its lowest income workers in its relief efforts.
Even with this incentive, we as a state need to do more, especially for members of the immigrant community filing with ITINs – many of whom are undocumented. All of these individuals were ineligible for both rounds of federal stimulus, due to their immigration status and remain ineligible for public benefit programs like CalFresh food assistance and CalWORKS supplemental grants. Despite working and contributing to our local economies and communities, these individuals remain excluded from some of our most effective assistance programs.
The direct cash payments through the Golden State stimulus are a good start, but we need to build on this success to make sure we do more for those excluded from federal support programs. The United Way network is advocating for a significant boost to the CalEITC that would be narrowly targeted to those filing with an ITIN, as well as, populations that aren’t benefitting from the federal EITC as they should be.
This year, we are advocating for two key proposals that leverage the power of the CalEITC so that it works better for those who need it most. Our first proposal would establish a floor for the CalEITC of $100 for populations not currently benefitting from the federal EITC. These populations include single childless workers, workers age 18-24 and 65 and over, as well as ITIN filers both with and without dependents. All of these populations are either completely excluded from the federal EITC or benefit very little from it.
The second proposal calls for a one-time increase of $500 in the CalEITC to all filers who are ineligible for the federal credit. This one time increase for 2022 is very much targeted to ITIN filers who have been left out of any stimulus funding from the federal government. This proposal is a direct attempt by the United Way network to ensure members of the immigrant community, many of whom have been hit hardest by COVID-19 are benefitting from our tax code in an equitable way. We know that refundable tax credits are one of the most effective ways for people to move themselves out of poverty and we need to ensure we leverage the CalEITC to do just that.
Our two proposals, coupled with the direct cash payments offered through the Golden State Stimulus, would bring the total benefit for ITINs and other populations up to $1200 for the year. That would bring these populations in line with the first round of federal stimulus offered through the CARES act. Many of the workers in these populations are working in either precarious employment or jobs that put them at constant risk of contracting COVID-19. We need to do better for workers by ensuring our stimulus efforts are focused on them and their needs. Our proposal to expand the CalEITC is another step in that direction. We as Californians have the opportunity to provide for all working families where the federal government cannot. It’s time for us to stand up and demand relief for those who need it most.
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