President Obama’s recently announced executive actions on immigration emphasized accountability and the requirement to pay taxes on the part of undocumented immigrants living and working in the United States. Under current tax laws, all individuals residing and working in the United States are generally required to file income taxes. Besides the legal requirement, there are other good reasons to file income tax returns, including eligibility for citizenship and other immigration benefits and potential tax refunds, credits or exemptions. Tax filings may be used as evidence of physical presence in the United States and also demonstrates good moral character and compliance with existing laws.
The filing of taxes is not currently a requirement to apply under President Obama’s deferred action programs for childhood arrivals (DACA) or parents of US citizen or permanent resident children (DAPA). However, it is likely that proof of taxes will be necessary to maintain and renew the work authorization under the deferred action programs. Prior taxes filed can also be used as evidence of continuous residence and physical presence in the United States which is required since January 1, 2010 under the new deferred action programs. Ultimately, tax filing will also most likely also be a requirement towards a path to citizenship under any new immigration legislation.
Most undocumented immigrants living and working in the United States are required to file an income tax return to report their U.S. earnings. For the most recent 2014 tax year, a single individual under 65 with no dependents must generally file a tax return if his or her income was $9,075 or more on their W-2 form(s) as a regular employee. Individuals who are independent contractors, including those who are self-employed and receive a 1099 form or whose employer does not report their income to the IRS, are required to file a tax return if they earned more than $400 last year. Those who do file a tax return may be eligible for a tax refund if taxes have already been deducted from their salary, may be eligible to claim the Child Tax Credit or exemptions for dependents.
To file a tax return, individuals who are not eligible for a Social Security number must apply for and use an Individual Tax Identification Number (ITIN). An ITIN is a nine-digit number issued to people who are not authorized to work in the United States but need to report income. An ITIN is used only for record keeping purposes and for filing taxes. One must complete a W-7 form and file it with their tax return to get an ITIN for the first time. Afterwards, the ITIN may be used to file future returns and also for opening a bank account, taking out a mortgage or for other financial transactions. The IRS recently changed the process and requirements to obtain an ITIN. Applicants must now present original identification documents to apply and the ITIN will expire if not used to file a tax return for five years. More information on the ITIN is available on the IRS website at http://www.irs.gov/Individuals/Individual-Taxpayer-Identification-Number-(ITIN).
The IRS does not share any information from taxpayers with other government agencies due to privacy provisions in the tax laws. It is also not in the IRS’s tax collection interest to disclose any information to the immigration authorities, since it will discourage those who are undocumented from filing tax returns.
“In preparation for any future legalization program it is in everyone’s best interest to file their taxes and report their income to show how long they have been living here and that they are able to support themselves and their families while paying their fair share,” according to John A. Stahl, Esq., Director of Immigration Legal Services at the Emerald Isle Immigration Center.
Lawful permanent residents, or green card holders, must also demonstrate that they have complied with the tax laws to apply for US citizenship and to maintain their permanent resident status. To become an American citizen, they will have to show evidence that they have filed taxes during the five years prior to their application for naturalization or proof that they were not required to file a tax return. To qualify for naturalization after only three years as a permanent resident, a citizenship applicants must show that they have been married and living together with their U.S. citizen spouse and have filed their last three years taxes as married. Failure to file a required tax return may be considered an act of bad moral character which is a temporary bar to attaining U.S. citizenship.
Under the Affordable Care Act, most people in the U.S. are required to have health insurance or pay a penalty beginning in 2014. People do not have to pay the penalty if they qualify for an exemption. Individuals with no immigration status, who cannot get insurance through the Marketplace are exempt from the mandate.
NOTE: THE EMERALD ISLE IMMIGRATION CENTER WILL BE HOSTING FREE PUBLIC INFORMATION SEMINARS AT OUR WOODLAWN AND WOODSIDE OFFICES ON THURSDAY, MARCH 19TH AND WEDNESDAY, MARCH 25TH, RESPECTIVELY, FROM 6-8pm.
OUR IMMIGRATION ATTORNEYS, IMMIGRATION COUNSELORS, HEALTH CARE NAVIGATORS AND PRIVATE ACCOUNTANTS WILL BE ATTENDING TO PROVIDE FREE UPDATES AND INFORMATION AND ANSWER QUESTIONS ON IMMIGRATION, HEALTH INSURANCE AND TAXES.
FOR FURTHER DETAILS PLEASE CALL THE WOODLAWN OFFICE AT 718-324-3039 OR THE WOODSIDE OFFICE AT 718-478-5502.