ITIN Revalidation Process in Need of Streamlining

A new survey of NCLR Affiliates reveals challenges Certified Acceptance Agents face in assisting immigrants through the process

In the weeks ahead, the Treasury Department and the Internal Revenue Service (IRS) will implement a requirement enacted last December that immigrants with older Individual Taxpayer Identification Numbers (ITIN) must revalidate. The details of the revalidation process are not yet known but it is clear that Certified Acceptance Agents (CAAs) will be critical. CAAs are full-time staff, frequently at community-based tax preparers, providing immigrants with one-on-one assistance when applying for an ITIN.

ITIN Revalidation Deadlines

One way that CAAs help is by certifying identity documents as originals and submitting an ITIN application on behalf of an immigrant. The IRS currently requires original identity documents—including birth certificates or passports—from immigrants applying for an ITIN. Once an application is submitted, it may take 10–14 weeks before these documents are returned with the ITIN.

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Decoding the Tax Deal: What It Means for Latinos and What Lies Ahead

Photo: http://401kcalculator.org, Creative Commons

Photo: http://401kcalculator.org, Creative Commons

With the New Year just around the corner, many of us are working to finish projects and tie up loose ends before heading off on vacation. Congress just did the same. Before leaving for the year, Congress passed a $680 billion tax deal making a number of credits permanent, including improvements to the refundable Child Tax Credit (CTC) and Earned Income Tax Credit (EITC) that were set to expire in 2017.

The CTC and EITC help keep low-income working Latino families out of poverty. Because of this legislation, about four million Latino working families, including nine million children, will not lose any of their tax credits. The EITC amounts to as much as $6,143 per family, while the CTC can add up to $1,000 per child. These credits are especially valuable to the Latino community because more than 40 percent of Latino workers earn poverty-level wages.

Even as we celebrate this victory, we are concerned by a number of restrictions targeting hardworking immigrant taxpayers. Some of these changes in the law will keep some from receiving credits and make it harder for other immigrants to access credits for which they are eligible. For example, anyone who receives a new Social Security number (SSN), regardless of immigration status, cannot claim the EITC retroactively (a process called “look-back”) after April 15, 2016. Most other filers remain eligible to claim their EITC for up to three previous years. The previous law allowed people with new SSNs to claim the EITC retroactively as well. Another change targeting immigrants is the fact that anyone who receives a new Individual Taxpayer Identification Number (ITIN) cannot claim the CTC or AOTC retroactively after April 15, 2016.

Other changes may result in challenges for immigrants that depend on an Individual Taxpayer Identification Number (ITIN) to pay taxes and receive credits available to workers. Some of these changes are based on guidance on the ITIN application process issued by the Internal Revenue Service in 2012. Since then, there has been a drop in ITIN applications, leaving some to wonder whether the guidance is making it too hard to get an ITIN. One of these changes includes the requirement for new ITIN recipients to reapply on a recurring basis to keep their ITIN. There are processing delays for ITIN applications under the current system; adding ITIN revalidation could worsen those delays and keep hardworking Latino immigrants from credits available to them.

The dedication and work of NCLR Affiliates and partners helped to successfully push for Congressional action to make tax credits for working families permanent. More work lies ahead to make sure the Latino community can maximize credits under the new law. The lead up to tax season offers the opportunity to make sure Latinos know their eligibility and how to claim credits successfully. There will also be a need to help ensure the new ITIN requirements are implemented fairly and effectively. To that end, the Latino community should be prepared to work with the Treasury Department on implementation. These and other efforts will help make sure now-permanent tax credits continue to make a difference in the lives of millions who are working but still struggling to get by.

For more information about the new tax package and its impact on Latinos read our new fact sheet—The Congressional Tax Package and Latinos: What You Need to Know.

On HAMP’s Fifth Anniversary, Don’t Push Struggling Homeowners Over the Edge

Photo: Jeffrey Turner

Photo: Jeffrey Turner

For five years now, the U.S. Department of the Treasury and U.S. Department of Housing and Urban Development have successfully administered the Home Affordable Modification Program (HAMP) for struggling homeowners. Through this program, working homeowners secured lower and more affordable mortgage rates, enabling families hit hard by the financial crisis to stay in their homes and avoid foreclosure.

This year, the program is set to begin winding down and expire entirely in 2015. That means the nearly 800,000 homeowners with HAMP mortgage adjustments will see their monthly payments rise as soon as this year. While the rate increases can vary widely from state to state, the national average increase will be $200 a month. In states with more HAMP mortgages, such as California and Hawaii, rates will jump by $300 and $356 per month, respectively. While this might not sound burdensome to some, for working families on the brink it is potentially catastrophic.

To keep 800,000 struggling American families in their homes during our weak economic climate, HAMP’s low mortgage rates should be extended or made permanent for all participants.

When HAMP was first drawn up in 2008, the idea was to temporarily stop the bleeding from the foreclosure crisis and ease the lowered mortgage rates back to their original market levels once the economy improved after two years. In 2008, that seemed like plenty of time for homeowners to get back on their feet.

Unfortunately, this is not the reality in 2014. Incomes are stagnant for all but the richest Americans, and the economy has not sufficiently recovered. Unemployment remains stubbornly high, with Latinos especially affected. The Latino community lost vast amounts of generational wealth during the recession, and millions of families are barely scraping by.

Recognizing that the Great Recession was much deeper and the recovery slower than thought in 2008, HAMP has already been extended twice.

To raise the rates on 800,000 families now would only further damage the economy by pushing an unconscionable number of working Latino families into default. During a weak recovery, the solution cannot be to force families out of their homes.

For the sake of nearly one million American families and our entire economy, affordable HAMP mortgage rates must be preserved through an extension or made permanently available.

In Era of Austerity, the President’s Budget Offers a Glimpse of What Could Be

By Eric Rodriguez, Vice President, NCLR

Jar of MoneyAfter years of federal budget policies that have slashed critical programs in order to reduce government spending, NCLR welcomes a much needed change in priorities demonstrated in President Obama’s budget proposal for fiscal year 2015.  The budget comes days after the announcement by the Treasury Department announced that the federal deficit is at its lowest point since 2008.

According to a 2013 national poll conducted by NCLR and Latino Decisions, an overwhelming 96 percent of Latino voters support a budget that invests in infrastructure and education to stimulate the economy.  The president’s budget calls for $56 billion in new discretionary funding for defense and non-defense priorities, offering significant wiggle room to address Latino voter priorities.  Specifically, this “Opportunity, Growth, and Security Initiative” would provide grants for preschool to two-thirds of the states by 2015 and prioritize job training resources for people with barriers to employment.  Other economy-boosting highlights in the budget include:

  • An increase in the federal minimum wage to $10.10 per hour
  • Expansion of the Earned Income Tax Credit for low-income workers who have no children
  • $15 billion for Project Rebuild, which would put people back to work rebuilding neighborhoods hit hard by the foreclosure crisis.
  • A $15 million boost to the HUD housing counseling program

Another top Latino issue included in the president’s budget is comprehensive immigration reform.  The budget uses the Senate-passed bill to calculate, which, if enacted, would reduce the federal budget deficit by $158 billion.

The president’s budget will not be debated in Congress but it communicates the Obama Administration’s priorities for priorities for the year ahead and in doing so, lays out a vision that contrasts with the bipartisan two-year deal that Congress enacted in December.  While the Congressional budget deal marked a rare bipartisan compromise and softened the blow of sequestration in 2014 and 2015, it doesn’t make up for multiple rounds of cuts in recent years and sets up the country to reopen those wounds before they are healed before 2016.  The American economy and Latino families are still hurting because of the deal’s strict caps on critical discretionary and nondiscretionary spending.  (We should note that the president’s budget adheres to these caps by offsetting the new proposed spending through efficiencies in spending on Medicare and other federal health programs).

It doesn’t have to be this way forever.  The midterm elections of 2014 are just around the corner and Latinos are poised to make their priorities known in the ballot box.  Regardless of political party affiliation, Hispanic voters report that they will consider the federal budget as they decide who to vote for; the majority intends to support candidates in 2014 that stop cuts to programs for children and youth in and address job creation and economic growth needs.  Members of Congress would do well to support aspects of the president’s budget that align with Latino voter priorities.