The Washington PostDemocracy Dies in Darkness

Maryland passed the nation’s largest tax credit for the poor. Democrats want it for noncitizens, too.

Health workers with CASA de Maryland hand out brochures with coronavirus information to people at a food distribution site behind Clifton Park Baptist Church in Silver Spring. Maryland lawmakers are advancing a bill to give pandemic aid to noncitizens. (Sarah L. Voisin/The Washington Post)
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The Maryland General Assembly is mired in a partisan fight over whether to use one of the nation’s most effective anti-poverty tools to help immigrants who are not citizens.

Democrats are advancing a bill to extend cash payments for the working poor to include taxpayers without Social Security numbers, citing a moral obligation to help all needy households amid a pandemic that has disproportionately harmed the poor and people of color. Their efforts put the state near the forefront of a national debate over expanding the social safety net for immigrants in the absence of federal immigration changes.

“They are Marylanders. They are taxpayers — let me repeat this, they pay their taxes — and yet they have been cut out of nearly every federal benefit,” House Majority Leader Eric G. Leudtke (D-Montgomery) said. “We have the power to help them, and that is all that matters.”

But the effort faces opposition from GOP lawmakers and Gov. Larry Hogan (R), who is term-limited and mulling his future role in the Republican Party — including a potential presidential run. Hogan refused to entertain including noncitizens in the $1.1 billion stimulus package approved this month, which is built around a temporary expansion of the state’s lump-sum cash benefit for the working poor, known as the earned-income tax credit, to be the most generous in the nation.

The governor, who has released a political ad hailing the stimulus bill as an example of functional, bipartisan government — said extending aid to immigrants who aren’t citizens would jeopardize the deal. (The bill also includes checks for people with unemployment claims in limbo; millions in grants for food banks and nonprofit organizations; tax cuts for the unemployed; aid to small businesses and many other constituencies disproportionately harmed by the pandemic’s economic fallout.)

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Maryland Democrats, who hold supermajorities in both legislative chambers, are now moving to pass separate legislation to help noncitizens — and say they will attempt to override Hogan if they provoke his veto.

As debate unfolded in the Senate, Republican lawmakers denounced the proposal as an unfair handout to people in the country illegally. Many of the immigrants it would help are lawful residents, with green cards or work visas, but others are undocumented. All pay taxes with an individual taxpayer identification number, or ITIN, or file a return with someone who uses one.

“The problem is that we don’t exactly know,” said Senate Minority Whip Michael J. Hough (R-Frederick), noting there is no way to distinguish between a taxpaying green-card holder and a taxpaying undocumented immigrant, the latter of whom he said should not be reaping any tax benefits.

Hough said the state’s stimulus bill left out the majority of U.S. citizens in Maryland because it mostly targeted those who own small businesses or are near the poverty line. And he questioned why taxpaying, noncitizen immigrants should be the next to get help.

The stimulus package nearly doubles the lump-sum payments to poor individuals and working families who qualify for the earned-income credit, which last year went to 440,000 of the state’s 3.2 million tax filers.

The program is modeled after and administered like the federal EITC, which Democrats and Republicans have called the country’s most effective anti-poverty tool. On average, beneficiaries in Maryland increase their earnings enough after three years that they no longer qualify for the credit, according to a legislative review of its impact.

“It gets bipartisan support because we, in this country, have a history of determining there are deserving poor and undeserving poor,” said Elaine Maag, a research associate at Urban-Brookings Tax Policy Center. “If you’re working, you’re considered part of the deserving poor.”

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Advocates for expanding the benefit note that adding a few hundred or few thousand dollars can transform life for a family that would otherwise need years to save that much.

“It’s the largest paycheck that someone receives in the whole year,” said Robin McKinney, whose nonprofit, the Maryland Cash Campaign, helps prepare tax returns so people can collect the money.

Some of her clients have used the money to pay down debt that otherwise would have resulted in an eviction. Others bought freezers to store food purchased on sale. The money has paid rental deposits on otherwise unattainable homes, she said, and become down payments on used cars that transport people to better jobs that pay enough to escape poverty.

“These are people who work in hospitals. These are your [nursing assistants]; these are people who work in grocery stores,” McKinney said. “They’re the people whose industries and lives have been hit directly by this” pandemic.

But federal rules bar families from receiving the credit if a household member who is listed on a tax filing lacks a Social Security number — someone who is undocumented or in the country on a work visa or for any other reason files taxes using an ITIN.

This, in turn, disqualifies the entire family from the state-level tax credit.

Hogan built much of his stimulus proposal around sending checks to people who qualified for the earned-income credit.

But he would not accept amendments pushed by the Latino and Black legislative caucuses that would have included taxpayers who are not citizens.

A warning from Hogan’s top lobbyist, Keiffer J. Mitchell Jr., to the Legislative Black Caucus further inflamed the issue. Mitchell said derailing the stimulus bill would also mean “sacrificing the $5 million in the bill for minority businesses,” which several lawmakers perceived as a threat.

Democrats dropped their efforts to modify the legislation, but the General Assembly’s presiding officers promised to launch a stand-alone proposal, which the Senate approved 32 to 15 on Friday with solely Democratic support.

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About 86,000 people in Maryland file tax returns without using a Social Security number, and lawmakers estimate that at least half of them make so little money they’d otherwise qualify for the EITC.

Many are from demographic groups hit hard by the pandemic — immigrants living in crowded conditions and working at jobs where they have to appear in person and interact with others.

“You have essential workers, people whose children are citizens,” said Del. Joseline A. Peña-Melnyk (D-Prince George’s), vice chair of the Latino Caucus. “They were left to basically rely on nonprofits that were already struggling. . . . This is morally the right thing to do.”

Only two states — California and Colorado — extend tax benefits to ITIN filers, and those policies were passed before the pandemic hit. Maryland is the only state to include an expansion of the EITC as part of a stimulus plan, according to the National Conference of State Legislatures.

Colorado lawmakers in December passed a $300 million stimulus package that includes payments and tax breaks to businesses and direct aid to residents for housing and utilities.

Similar proposals are pending in California and Minnesota.

California Gov. Gavin Newsom (D) has proposed a stimulus package that provides $600 checks to residents with an annual income of $30,000 or less and — like Hogan’s plan — focuses on EITC recipients. In Minnesota, the proposal by Gov. Tim Walz (D) includes an expansion of the Working Family Tax Credit, which is similar to the federal EITC.

In Maryland, stimulus checks have begun going out to lower-income people who are U.S. citizens. The expanded tax credit will arrive as soon as they file their 2020 tax returns, and they will be eligible to receive that higher amount for the next three years.

On Tuesday, a House of Delegates committee will take up the bill to extend the help to immigrants as well, and the proposal could be headed to Hogan’s desk by the end of the week.

Even if the governor vetoes the bill, lawmakers would have time to override his veto before they adjourn in April.

Correction: An earlier version of this story incorrectly described who files taxes using an Individual Taxpayer Identification Number. Green card holders can file using a Social Security number.

Ovetta Wiggins contributed to this report.

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