When Selene Dominguez Soto heard families were going to get monthly payments through an expansion of the child tax credit, she scoffed. “Don’t get your hopes up,” she thought to herself. “We are always excluded.”
But Dominguez Soto’s husband, Raymond, was confident. The couple has two kids, ages 5 and 8. As a truck driver for an automotive parts company, Raymond earns well under the $75,000 threshold for a single person and far below the $150,000 limit for a couple to receive the full payment (Dominguez Soto goes to school full time). The family checks every box.
The last time the government made a promise to send hundreds of dollars to low- and middle-income families through stimulus payments, mixed immigration status families like the Dominguez Sotos — some members are U.S. citizens but others are undocumented — were shut out.
When the child tax credit was expanded this year, it was designed to serve the lowest wage families in the country. Families who made nothing qualified for the first time, as did undocumented people like Dominguez Soto, so long as their kids had Social Security numbers. The credit was altered so that the payments, which increased to as much as $3,600 a year per child, would start to arrive via monthly installments in July — $300 for each child under 6 and $250 for kids 6 to 17 — instead of annually. The Dominguez Soto family was set to receive $550 a month.
When the July payment didn’t arrive, Raymond, a U.S. citizen, was livid.
“I do everything I’m supposed to do,” he told Dominguez Soto. “I pay my taxes, I work hard and for what? We do so much to contribute. For them to exclude us like this, it’s upsetting.”
For Dominguez Soto, it was an expected — though disappointing — reminder that mixed status families are always at the back of the line, even when policies are created to help those who need the aid the most.
The Internal Revenue Service, which administers the credit, said in a statement last month that an unspecified “issue” caused families in which one of the parents had an Individual Taxpayer Identification Number (ITIN) — a tax processing number available for undocumented people — to not receive the credit in July. Instead, those families would get the money in two portions in August.
That has begun to happen. Payments began to go out to 1.2 million mixed status families last week, an amount totaling $575 million, according to the office of Rep. Rosa DeLauro, a Connecticut Democrat who has been the lead advocate of the tax credit for almost 20 years. A Facebook group of more than 4,000 mixed status families was inundated with posts last week from those who were receiving those payments.
But among those messages were dozens of others from families who still had not received anything at all, or who the government marked ineligible with no further explanation.
Some mixed status families are not receiving the funds, likely because of additional hurdles already in place for immigrant families who file taxes. Issues with ITINs, direct deposit information, or even small mistakes in the applications can send them into a pool to be manually audited that could delay families from receiving the money on a monthly basis. (If later found eligible, they will be able to claim it in their 2021 taxes next year.)
“We are aware of the situation — the payments are coming,” said IRS spokesperson Anthony Burke. “People who didn’t receive their payment in the last month, we will provide bigger payments to make up the difference by the end of the year.”
The IRS was unable to quantify how many people fall into this category, and specifically what may be causing mixed status families to be marked ineligible.
Dominguez Soto, who has an ITIN and has lived in the United States for 25 years, was hoping to use the money to put down a rental deposit on a home or apartment closer to her kids’ school. She drives more than 20 minutes each way multiple times a day. The check engine lights are on in both her car and Raymond’s — they know they need maintenance, but between gas, new school supplies and rent, they have little left over. Her family was marked ineligible for the credit without further explanation, and she hasn’t been able to get through long hold times to speak to the IRS and understand why.
It’s exactly those kinds of families that the credit promised to help, said Aracely Panameño, the director of Latino affairs at the Center for Responsible Lending.
“These are the most vulnerable … these are the folks that can least afford to have any delays,” Panameño said. “These people pay the highest price when things don’t work.”
Many of those are Latinas, who over the past year and a half have had the highest unemployment rate of any group, 20.1 percent, and have recovered at a slower rate than White women. Last month, Latinas’ unemployment rate was 6.7 percent compared to White women’s 4.5 percent.
“If they are lagging behind, there might be an element there of single parenting and they would be in desperate need for these funds,” Panameño said.
Mixed status families have been shut out of aid over the past year that was designed to stabilize the economy. Initially, families where one person in the home had an ITIN did not qualify for stimulus checks. Although that was later changed so that U.S. citizens in mixed status homes could get payments, ITIN holders, who also pay taxes, still could not. Many families did not receive their stimulus payments until they claimed them on their 2020 taxes.
Undocumented workers do not qualify for unemployment insurance, including enhanced federal benefits available during the pandemic.
ITIN holders who were business owners were also shut out from applying for Paycheck Protection Program loans last year until the Biden administration changed the rules of the program this year to allow non-citizens to apply.
The problem with the child tax credit now is just a continuation of a series of decisions that have shut out tax-paying residents from aid they help fund — and it’s not often until much later that those issues are rectified.
“When do we ever learn?” Panameño said.
The lack of solutions for immigrant families reflects the pressure that has been mounting for the Biden administration to deliver a more robust immigration agenda that better understands the scope of need for immigrants, said Eric Rodriguez, the senior vice president for policy and advocacy at UnidosUS, the nation’s largest Latinx advocacy organization.
The Biden administration has rejected the divisive rhetoric of the Trump administration, he said, but “in terms of the mechanism of government — how do you deliver goods and services to the community — that’s where a lot more cultural competency is necessary.”
To get the child tax credit, for example, people who previously weren’t eligible for it need to go through a verification process that includes providing a photo of themselves. That’s a barrier for undocumented people, who may be worried the information will be used against them and shared across government agencies.
People also need to have a valid ITIN to get the credit. Applications for ITINs are backlogged by at least three months, Rodriguez said, and some people may not know that their ITIN was up for renewal during the pandemic, which may be blocking them from getting the credit. On top of that, predatory practices by scammers targeting marginalized people with disinformation about the credit is also getting in the way of access to the funds.
For those who don’t typically file taxes, the IRS set up a portal to allow people to apply. But as soon as someone inputs an ITIN, the portal doesn’t allow them to continue, said Will Gonzalez, the executive director of Ceiba, a coalition of Latinx community-based organizations in Philadelphia that runs a tax preparation site. So the portal, which was designed so the lowest income people could apply, is not working well for undocumented people, Gonzalez said.
This week, the IRS unveiled an updated version of that portal with simpler language that makes it easier for families to use. Unlike the prior version, it’s available in Spanish and compatible with mobile devices (poor families are more likely to have smartphones than laptops). But it’s unclear if it fixes the issue with ITINs.
The administration knew that the true challenge of the credit was going to be educating people about all the changes, and particularly ensuring those who were newly eligible applied. It set up a Child Tax Credit Awareness Day in June, ahead of the first payments, to do just that. But advocates argue more funds should have gone to community organizations to help do the one-on-one work of signing people up, particularly undocumented people, who might face a language barrier or lack familiarity with applications for U.S. benefits.
“There aren’t enough navigators, there aren’t enough intermediaries in communities to help families who are newly eligible to apply and get the credits that they deserve in the system. So you have a lot of issues with not finding trusted support,” Rodriguez said.
Meli Hernandez, a U.S. citizen with 11-year-old twins, said she has been marked ineligible for the child tax credit even though her husband, Hugo Aparicio, who was an ITIN holder at the start of the year, got his Social Security number in May.
When she called the IRS to inquire about their status, she said she was told that they couldn’t tell her why her family wasn’t eligible. They meet all the requirements.
Hernandez is worried her husband, who works in landscaping in Michigan, could lose work during the winter months. The child tax credit payments could help them get by, and help fund her childrens’ school needs. But she has no way of knowing if the payments are just going to come in one lump sum next year, which was typical before the expansion.
Without it, it’s difficult to plan, said Hernandez, 40.
“I’m very frustrated with the whole system because I have no options and I should have options,” Hernandez said. “We are being treated like we don’t belong in this country.”
If successful, the child tax credit has the potential of slashing child poverty in half, with the most significant poverty reduction coming for Latinx and Black children. But that potential can’t be realized if those families can’t be reached.
In terms of the mechanism of government — how do you deliver goods and services to the community — that’s where a lot more cultural competency [in the Biden administration] is necessary.Eric Rodriguez, senior vice president for policy and advocacy at UnidosUS
The numerous hurdles for undocumented families have left some in complete limbo.
In North Carolina, Liliana Mata Juarez, her husband and their 5- and 3-year-old sons, have not yet received the credit, but have not been marked ineligible. Both of them are gig workers — he does landscaping and she cleans office buildings. Their taxes are being amended because her employer submitted an incorrect form.
That’s put them in a holding pattern they’re all too familiar with. The family didn’t receive the first two stimulus payments until they came back in their tax return, and they didn’t initially qualify for unemployment insurance.
Things have gotten more dire in the past month. Her husband has had less work due to heavy rains, and she fears that her hours, already reduced to 24 a week, may go down further if offices close again due to the spread of the COVID Delta variant. This is the first month they know they won’t make rent on their mobile home.
Juarez said she’s developed insomnia, up all night thinking about how they can manage this month. She takes on the stress herself because her husband is already doing so much, she said, working extra gigs where he can find them. He works from 6 a.m. to 8 p.m. most days. What if he’s stressed and has an accident at work? She can’t put that on him, she said.
Her boys, meanwhile, don’t understand. They ask her why other kids get things they don’t get. “For your birthday,” she tells them. “One day.”
A few weeks ago, they got the list of her eldest son’s school supplies for the new year. It was going to cost $85 but she didn’t have enough to get everything on the list. She wrote to the school, asking for an extension into the fall to give her time to get the supplies. (A school social worker wrote back and covered the cost of the supplies plus a $50 gift card for a backpack and some new shirts).
If she has to cut the WIFI, she will, Juarez said. If she has to cut the phones, that will go, too. Those are luxuries, she said. But the child tax credit could help with the kids supplies, the light bill and the rent.
“Our children are from this country, I’m from this country and it’s like we are paying for other people that sometimes don’t need that benefit,” she said. “And we’ve just got to watch and be like, ‘OK.’”
When she checks her status online, it tells her it is yet to be determined. Her fear is that by the time the IRS gets to her case, she won’t be able to get the monthly payments that other families have relied on this year. Or worse — that she won’t get them at all.