After a lengthy partisan debate on the Senate floor Wednesday, Democratic senators moved forward with their proposal to provide relief for taxpayers who were left out of a recent statewide relief effort.
Because the recently passed RELIEF Act relied on the Earned Income Tax Credit (EITC), which requires a Social Security number, as a vehicle to get relief to low-income Marylanders, advocates and Democratic lawmakers worried that people who file taxes using individual taxpayer identification numbers (ITIN) were left out.
People who pay taxes using an ITIN include undocumented immigrants and “some people who are lawfully present in the U.S., such as certain survivors of domestic violence, Cuban and Haitian entrants, student visa–holders, and certain spouses and children of individuals with employment visas,” according to the National Immigration Law Center.
More than 86,000 ITIN filers paid more than $100 million in state and local taxes last year, according to Comptroller Peter V.R. Franchot (D), and many of those taxpayers would meet the EITC income criteria.
After the RELIEF Act passed without ITIN filers included last week, Senate President Bill Ferguson (D-Baltimore City) and House Speaker Adrienne A. Jones (D-Baltimore County) promised to extend EITC benefits to ITIN filers for the 2020, 2021 and 2022 tax years. Rather than introduce a new bill, Senate Democrats opted to amend an existing tax credit effort to include ITIN filers.
As it was originally introduced, Senate Bill 218, introduced by Sen. Nancy J. King (D-Montgomery) would have created a refundable credit for the state’s income tax equal to $500 for each child dependent under the age of six or under the age of 17 with a disability. That child tax credit would apply to taxpayers who make a federal adjusted gross income of $6,000 or less.
The amendment adds language to extend the EITC to ITIN filers for the 2020, 2021 and 2022 tax years, as promised by the legislature’s Democratic leadership. The child tax credit is also changed slightly, removing children under the age of six from the proposal but keeping the tax credit for children under the age of 17 with disabilities. It was approved along party lines by the Senate on Wednesday.
Senate Republicans vehemently opposed the ITIN amendment, arguing that it would mean a $60 million reduction in the state’s general fund each year. Several Republican senators also opposed extending tax relief to immigrants who are “unlawfully” in the country.
“We’re going to spend $60 million creating a special welfare program and checks for these individuals,” Minority Whip Michael J. Hough (R-Frederick) said. “This is not just simply reducing their tax liability. This reduces their tax liability to zero and get money from taxpayers and mail it back to them. It incentivizes people to come in the country illegally.”
Democrats, on the other hand, pointed out that many undocumented immigrants and other ITIN filers are essential workers – and have been excluded from federal relief efforts throughout the pandemic despite paying taxes.
“All they’re looking for is a life for themselves and their families,” King, the Senate majority leader, said, “If anybody is going to get anything out of this amendment on this bill, I’m telling you, they won’t get rich. They might be able to buy a little bit of food for their families, maybe pay a little bit of rent.”
Sen. James C. Rosapepe (D-Prince George’s and Anne Arundel) emphasized that ITIN filers pay the same taxes as people with Social Security numbers in urging the legislature to adopt the amendment. He said the $100 million figure only includes income taxes.
“They also pay sales taxes,” Rosapepe said. “They pay property taxes directly when they own a home, or they pay through their rent when they rent. They also pay telecommunications taxes when they make phone calls. They pay hundreds of millions of dollars in taxes to state and local governments every year.”
Sen. Delores G. Kelley (D-Baltimore County) said ITIN filers make up a vital part of the United States’ economic infrastructure and emphasized that they deserve equal treatment as taxpayers.
“We need to be fair to Americans who are working, who are struggling, and who are doing the work that many of us and our families don’t want to, but work which is absolutely essential for the wellbeing of the body politic,” Kelley said. “They are hard working Americans with children.”
Senate Minority Leader Bryan W. Simonaire (R-Anne Arundel) attempted a last-minute amendment that would’ve restored the bill to its original language, but that proposal failed along party lines.
“Let’s take care of all most vulnerable in our state first,” Simonaire said. “And if you want to bring another bill back, you can deal with this. But we have to take care of those who are hurting the worst in our state first, before we start giving it to those who are unlawfully in our country.”
At a press briefing after the amendment to include ITIN filers was passed Wednesday, Simonaire again warned of a perceived leftward drift in the Senate. He said longtime Senate President Thomas V. Mike Miller Jr. (D) helped to “moderate” the Senate, even after he stepped down as president.
“We’re seeing more liberal bills in there, and it’s getting farther and farther left,” Simonaire said.
The newly amended bill will now move on to third reading on the Senate floor.