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Blog Post · April 4, 2024

Are Eligible Undocumented Immigrants Claiming the CalEITC and Young Child Tax Credit?

photo - Mother Working on Paperwork at Home and Holding Baby

Low-income Californians who file tax returns with Individual Taxpayer Identification Numbers (ITINs)—primarily undocumented immigrants—are eligible to claim the California Earned Income Tax Credit and Young Child Tax Credit (CalEITC and YCTC). In 2023, about 9% of CalEITC claimants filed with an ITIN. This share is at least double the share of ITIN users among all California filers and consistent with findings that poverty among undocumented Californians is more than double the statewide average. Furthermore, ITIN filers who claim the tax credits may see them later in the year than other filers.

The CalEITC has been around since 2015, but undocumented immigrants have been eligible to claim the credit only since 2021. While we might expect increasing shares of those who claim the credit to be ITIN holders—as they file taxes for the first time after learning about its existence—so far, we do not find evidence of a clear trend.

Last year, the credits were claimed later in neighborhoods with more noncitizens, and there were fewer claims relative to the number of potentially eligible families. By mid-March this year, nearly 1.5 million California tax filers had claimed the CalEITC; 6% of these filers used an ITIN.  Of the 230,000 Californians who claimed the YCTC, 8% used an ITIN.

Claims by ITIN filers are often processed later in the year than claims by filers with Social Security numbers (SSNs). By late February 2023, the state had processed 26% of year-end CalEITC claims and 39% of YCTC claims by filers with SSNs; for ITIN filers, 21% and 28% had been processed. ITIN filers did not catch up with SSN filers in the processing of CalEITC claims until August; for YCTC, they caught up in October. Gaps were similar in both 2022 and 2021.

Broadly speaking, these later dates suggest that ITIN users may file their returns near the end of the tax season; they also may experience delays around when their claims are processed. For new filers, the time it takes to get an ITIN from the IRS may play a role in filing, as might time spent gaining confidence with engaging with public services. Filing delays among YCTC claimants indicate a need to better understand experiences of ITIN filers with young children.

One way to address the gap could be to scale up the IRS Volunteer Income Tax Assistance (VITA) program, which provides free tax prep assistance to low-income filers. VITA currently serves a fraction of CalEITC claimants—and has limits on federal funding to support initial ITIN applications.

ITIN filers who claim these credits tend to rely more heavily on paid tax preparation than do SSN claimants (about 90% vs. about 60% of CalEITC claimants in 2023). While YCTC claimants with ITINs may be slightly more likely than those with SSNs to use the VITA program (1.6% vs. 1.2% in 2023). Overall, however, few filers utilize the program. Expanding its reach and ensuring that program sites can provide services for new ITIN filers might benefit those who seek out assistance with tax preparation.


California Earned Income Tax Credit Health & Safety Net Immigrants in California income Poverty & Inequality tax credits taxes undocumented immigrants