Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, stimulus payments of $1,200 per adult and $500 per dependent child are being made available to most individuals and families.
However, families with mixed immigration status were excluded from receiving COVID-19 stimulus payments due to a requirement in the bill that the money go only to taxpayers who file returns with Social Security numbers. In particular, with joint returns, both spouses have to have a Social Security number.
Those who were left out have now turned to the federal courts, arguing it's unconstitutional to deprive them of the funds every other American received.
Millions of families have been left without stimulus funds
Under the CARES Act, U.S. citizens who file joint tax returns with spouses who use Individual Taxpayer Identification Numbers (ITINs) will not receive any stimulus payments. This includes most citizens married to immigrants.
These citizens are deprived of the $1,200 they would normally be due for their own portion of the stimulus payment. They also lose out on the $500 they'd normally receive for eligible dependent children who are citizens.
Although the CARES Act created an exception to this rule for military families, around 1.2 million citizens are married to immigrants with no Social Security numbers, and most are not covered by this carve-out. They're effectively excluded from the stimulus payments because of whom they are married to and have few options to fix the problem.
Citizen spouses can get a stimulus check by filing a tax return as married filing separately, but this isn't always possible or advisable. Some families have already have filed joint returns for 2019 and would have to amend their returns to file separately. "Married filing separately" status also has other tax consequences, including eliminating eligibility for or curtailing certain deductions and credits such as the following:
- The Adoption Tax Credit
- The American Opportunity Tax Credit
- The Child and Dependent Care Tax Credit
- The Earned Income Tax Credit
- The Lifetime Learning Tax Credit
- The Student Loan Interest Deduction
- Deductible contributions to traditional IRAs
- Contributions to Roth IRAs
This means millions are being forced to chose between missing out on a stimulus payment during the coronavirus recession and missing out on tax breaks that could save them hundreds or even thousands of dollars.
Affected families are turning to the federal courts, but any relief will take time
Some affected families aren't simply accepting their fate and giving up on getting their stimulus funds.
Instead, multiple lawsuits have been filed -- including a proposed class action in the Northern District of Illinois on behalf of these citizens with immigrant spouses and another in Maryland on behalf of citizen children who will see no stimulus money because their parents are not citizens.
Plaintiffs argue the denial of stimulus funds to these citizens because of their spouses' or parents' immigration status is intentional, unlawful, and discriminatory. Their complaints also allege their exclusion is unconstitutional as a violation of the equal protection clause.
They're asking the court to rule they're entitled to receive this money just as every other American is. If the court finds in their favor and declares the CARES Act's provisions excluding them cannot stand, the IRS may be sending out a lot more stimulus money in the future.
Other sources of aid are available
The lawsuits aiming to help mixed-status families get COVID-19 stimulus payments will take time to resolve.
These are generally available not only to citizens, but also to others who were legally authorized to work in the United States, so be sure to check your state's guidelines and eligibility rules if your income has been affected by coronavirus.