NJPP REPORT: Building a More Immigrant Inclusive Tax Code: Expanding the EITC to ITIN Filers

NJPP REPORT: Building a More Immigrant Inclusive Tax Code: Expanding the EITC to ITIN Filers
For Immediate Release

July 15, 2020 – New Jersey could make its tax code fairer and more inclusive by expanding the state’s Earned Income Tax Credit (EITC) to immigrants who file taxes with an Individual Tax Identification Number (ITIN), according to a new report by New Jersey Policy Perspective (NJPP) released on Tax Day.

The EITC, a refundable tax credit claimed when workers file their income tax returns, is a proven tool for boosting the take home pay of low- and moderate-income workers and their families. Not all workers qualify, however, due to narrow eligibility requirements, specifically that a qualifying taxpayer, their spouse, and any qualifying children claimed as dependents must have a Social Security Number (SSN). In New Jersey, 225,000 residents live in households that file taxes using an ITIN.


A new report by NJPP, Building a More Immigrant Inclusive Tax Code: Expanding the EITC to ITIN Filers, finds that New Jersey has 139,751 households who file taxes using an ITIN. Approximately half (77,560) would qualify for the EITC but for the requirement to have a Social Security Number.

“The EITC’s narrow eligibility requirements push many households who are struggling to make ends meet further behind,” said Vineeta Kapahi, Policy Analyst at New Jersey Policy Perspective and author of the report. “By simply reducing barriers to the EITC, the state could take a step toward addressing racism and anti-immigrant bias in the tax code. Extending the EITC to include households who file taxes using an ITIN would help thousands of New Jersey residents better afford their basic needs, improve health and education outcomes, and provide a boost to state and local economies.”


According to the report, extending the state EITC to ITIN filers would benefit an estimated 54,100 households in New Jersey, assuming current participation rates. This proposal would add an estimated $54.5 million to the state economy, benefitting workers, businesses, and communities in every corner of New Jersey.


“As New Jersey recovers from unprecedented health and economic crises, we are missing out on an opportunity to both improve the economic security and wellbeing of families who have fallen on hard times and send a much needed boost to local economies across the state,” Kapahi added.


Read the full report here.


New Jersey Policy Perspective (NJPP) is a nonpartisan think tank that drives policy change to advance economic, social, and racial justice through evidence-based, independent research, analysis, and advocacy.


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