Various pages of the US IRS tax return forms. Photo by Phillip Rubino/Getty Images
The legislative session featured a number of wins for undocumented immigrants in Minnesota, headlined by laws that opened up access to drivers’ licenses and the public insurance program known as MinnesotaCare.
The DFL-controlled Legislature also passed a number of other programs — including several tax credits — that received less attention but are available to Minnesota residents regardless of their immigration status.
People who do not have Social Security numbers can file taxes using a tax ID — known by the acronym ITIN — issued by the IRS.
Minnesota is home to approximately 81,000 undocumented immigrants, and about half have incomes at or below 200% of the federal poverty level, according to the Migration Policy Institute, a nonprofit immigration think tank.
In 2018, 23,000 people filed tax returns in Minnesota using an ITIN, Minnesota Department of Revenue commissioner Paul Marquart said.
Many tax credits, like the renter’s credit, have long been available to ITIN filers. But some barriers existed where the law specifically required Social Security numbers for certain benefits, like obtaining a homestead exemption from a county, said Nan Madden, director of the Minnesota Budget Project, a progressive think tank.
Some of the credits are new, while others are newly-expanded to include those filing with an ITIN.
An individual’s immigration status can still have a wide range of ramifications. For example, incarcerated noncitizens in Minnesota often can’t access prison programming like work release or drug rehabilitation, according to reporting this week by Sahan Journal.
Still, the expansion of benefits to include people regardless of immigration status underscores the changing politics of immigration in Minnesota, where drivers’ licenses for undocumented people languished in legislative limbo for years despite bipartisan support, and Republicans talked about punishing “sanctuary cities” the last time they held both chambers of the Legislature. Now, however, the DFL-controlled Legislature is looking for ways to expand benefits to all Minnesotans.
Enrollment in MinnesotaCare isn’t expected to open for undocumented residents until 2025, but the following programs are now available for all qualifying Minnesotans:
Child Tax Credit
Parents of children under the age of 18 are eligible for a $1,750 credit per child, with no cap on the number of children. The credit begins to phase out for married filers who make $35,000 annually and $29,500 for single taxpayers.
This credit is “refundable,” meaning the credit will first be applied to the taxes an individual owes, but if there’s money left over, it’ll be sent to the taxpayer.
Researchers expect the tax credit to reduce child poverty in Minnesota by one-third.
Working Family Credit
The working family credit is available to low-income single people and various family types, including some families with children over the age of 18. The amount of the credit depends on the family’s income and the number and age of the children in the household. The state’s Department of Revenue expects 9,000 taxpayers filing with ITINs to be included in expanded credit with an average credit of $1,087, Marquart said.
The working family credit is also refundable.
Homestead Credit Refund
Certain homeowners without a Social Security number can now claim homestead classification with their county. Homestead classification lowers the taxable market value of the property, resulting in lower property taxes. Households making less than $128,280, and homeowners whose property values increased significantly, may also qualify for the Homestead Credit Refund.
Around 1,900 homeowners will now be eligible for the credit, Marquart said.
One-time tax rebates for 2021
The state surplus grew to $17.5 billion, and the government is returning some of that money to taxpayers through one-time checks. Taxpayers are eligible if they lived in the state for at least part of 2021, filed a Minnesota tax return or property tax refund, and made less than $75,000 for individuals or $150,000 filing jointly. Qualifying individuals will receive $260 and married couples who filed jointly will get $520.
Taxpayers will also get $260 for each dependent on the tax return, up to $780.
Insulin Safety Net Program
Minnesotans can now use their ITIN to qualify for the Insulin Safety Net Program, which provides access to reduced-cost insulin for those in need. The Urgent Need program allows qualifying patients to get a 30-day supply of insulin for a $35 co-pay. The Continuing Need Program helps secure insulin over the longer term, with patients paying no more than $50 per 90-day supply.
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