IRS Says Undocumented Immigrants Can Begin Filing Taxes and Receive EITC

Yesterday (Monday March 2, 2015) the US IRS confirmed Undocumented Immigrants Can Begin Filing Taxes.

Qualified immigrants residing in the US and working here who qualify will now receive their Earned Income Tax Credits for years and years past. The decision could be a windfall for tax preparation companies and will introduce thousands of dollars of back-pay to immigrants who claim and qualify for Earned Income Tax Credits for years past.

The decision could increase consumer spending power into Hispanic communities nationwide, as the decision would allow immigrants to claim Earned Income Tax Credits for Years past, possibly thousands to tens of thousands of dollars per family.

The IRS explanation came in a letter from Commissioner John Koskinen to Sen.Charles Grassley (R. Iowa). In response, Mr. Grassley vowed to push legislation to overturn the policy.

The action allows many to obtain work permits and Social Security numbers, which allows those those who qualify to apply for the Earned Income Tax Credit (EITC). The credit provides refund payments of checks to lower and moderate income households with children.

The credits were designed in the 1970s and signed into legislation by former US President Ford and expanded by President Ronald Reagan, who deemed it “the best anti-poverty, the best pro-family, the best job creation measure to come out of Congress.”

The EITC was designed to encourage work among lower and moderate-income individuals, especially those with families, who have to be working to receive the credit. In the US, half of those lifted out of poverty by the EITC are children. Supporters of the EITC say it increases the after-tax net income of targeted groups, reduces poverty and reduces income inequality.

Undocumented immigrants who work in the US and pay taxes, and are parents of children who are US citizens have until now not qualified for the EITC.