Tax Benefits and Credits for Immigrants in North Carolina in 2025

Key Takeaways

• North Carolina reinstated state Earned Income Tax Credit at 5% federal amount for 2025 tax year via Senate Bill 211.
• Only immigrants with valid Social Security Numbers are eligible for federal and state EITC and Child Tax Credits.
• Undocumented immigrants and ITIN filers remain ineligible but must still file taxes to document income.

As of July 2025, important changes have taken place regarding tax benefits and credits for immigrants living in North Carolina. The most significant update is the reinstatement of the state Earned Income Tax Credit (EITC) through Senate Bill 211. This update affects many working families, especially those with low to moderate incomes. However, there are specific rules about who can claim these credits, and not all immigrants are eligible. Below, you’ll find a clear summary of what has changed, who is affected, the effective dates, required actions, and what these changes mean for pending and future tax filings.

Summary of What Changed

In March 2025, the North Carolina General Assembly passed Senate Bill 211, bringing back the state Earned Income Tax Credit (EITC) after several years of absence. This credit is now available for the 2025 tax year and is equal to 5% of the federal EITC amount that a taxpayer qualifies for. The state EITC is refundable, which means if your credit is more than the taxes you owe, you’ll get the extra amount as a refund.

Alongside this, federal tax credits like the Child Tax Credit (CTC) and the federal EITC remain available for eligible taxpayers. However, both federal and state credits have strict requirements about who can claim them, especially when it comes to immigration status and the type of tax identification number used.

Who Is Affected by These Changes

The reinstatement of the North Carolina state EITC mainly affects:

• Low- and moderate-income workers who live in North Carolina and qualify for the federal EITC.
• Immigrant families who have valid Social Security Numbers (SSNs) and meet all other eligibility rules for the federal EITC and CTC.
• Undocumented immigrants and ITIN filers (those who use an Individual Taxpayer Identification Number instead of an SSN) are not eligible for these credits, both at the federal and state levels, as of July 2025.
• Part-year residents and nonresidents who earned income in North Carolina may be eligible for a prorated portion of the state EITC, depending on their income earned within the state.

Effective Dates

• Senate Bill 211 was enacted in March 2025.
• The state EITC applies to tax returns filed for the 2025 tax year (returns due in 2026).
• Federal EITC and Child Tax Credit rules remain unchanged for the 2025 tax year.

Required Actions for Taxpayers

If you are an immigrant living in North Carolina, here’s what you need to do to take advantage of these tax benefits:

For Immigrants with Valid Social Security Numbers (SSNs):

• File your federal tax return and claim the federal EITC and Child Tax Credit if you meet the income and family size requirements.
• File your North Carolina state tax return and claim the state EITC, which is 5% of your federal EITC amount.
• Use IRS Direct File or free tax preparation services to make sure you claim all credits you’re eligible for and to avoid unnecessary fees. The IRS Direct File tool is available here.

For Undocumented Immigrants or ITIN Filers:

• You are not eligible for the federal or state EITC or the Child Tax Credit as of July 2025.
• You are still required to file taxes if you earn income, even if you use an ITIN. Filing taxes can help you show a record of paying taxes, which may be useful for future immigration applications or legal status changes.
• Stay informed about possible changes to eligibility rules. There is ongoing discussion at both the state and federal levels about expanding these credits to include ITIN filers and undocumented immigrants.

For Part-Year Residents and Nonresidents:

• If you lived in North Carolina for only part of the year or earned income in the state, you may be able to claim a prorated state EITC based on your North Carolina income.

Implications for Pending and Future Applications

If you have already filed your 2025 tax return before the passage of Senate Bill 211, you may need to file an amended state return to claim the new state EITC. The North Carolina Department of Revenue will provide instructions on how to do this. For future tax years, be sure to check the latest eligibility rules and filing instructions, as these can change from year to year.

Detailed Overview of Key Tax Credits and Programs

North Carolina State Earned Income Tax Credit (EITC) in 2025

• Amount: The state EITC is equal to 5% of the federal EITC you qualify for.
• Eligibility: You must qualify for the federal EITC to claim the state EITC. This means you need a valid SSN and must meet income and family size requirements.
• Residency: Available to North Carolina residents and part-year residents. Nonresidents can claim a prorated credit based on income earned in the state.
• Refundable: If your credit is more than your state tax owed, you get the extra money as a refund.
• Exclusions: Undocumented immigrants and ITIN filers are not eligible, as the state EITC is tied to the federal EITC.

Federal Child Tax Credit (CTC) and EITC for Immigrants in North Carolina

• Federal EITC: Only available to taxpayers with valid SSNs. The amount varies based on income and family size.
• Child Tax Credit: Also requires a valid SSN for both the taxpayer and the qualifying child. The maximum credit is up to $2,000 per child.
• ITIN Filers: Not eligible for either credit at the federal level.
• Policy Discussions: There is ongoing advocacy to expand these credits to ITIN filers, but as of July 2025, no changes have been made.

Other State-Level Tax Benefits and Programs

• Low-Income Housing Tax Credit (LIHTC): This program helps build affordable housing for low-income families, including immigrants. However, the credit goes to developers, not directly to individuals. Immigrant families may benefit by having more affordable housing options.
• Tax Contributions by Undocumented Immigrants: Despite being ineligible for most credits, undocumented immigrants in North Carolina contribute nearly $700 million each year in state and local taxes through income, sales, and property taxes.

Summary Table of Key Tax Credits for Immigrants in North Carolina (2025)

Practical Steps for Immigrants in North Carolina to Access Tax Benefits in 2025

If You Have a Valid SSN:

• Check your eligibility for the federal EITC and Child Tax Credit using the IRS’s online tools.
• File both federal and state tax returns to claim all credits you qualify for.
• Use free tax preparation services if you need help. Many community organizations and the IRS offer free help for low-income taxpayers.
• Keep records of your income, family size, and any correspondence from the IRS or North Carolina Department of Revenue.

If You Use an ITIN:

• File your taxes as required by law, even if you are not eligible for credits.
• Stay updated on policy changes. Advocacy groups are pushing for expanded eligibility, and rules may change in the future.
• Consider seeking help from immigrant advocacy organizations for the latest updates and support.

If You Are a Part-Year Resident or Nonresident:

• Calculate your North Carolina income carefully to claim the correct prorated state EITC.
• Review state filing instructions for part-year and nonresident filers.

Expert and Stakeholder Perspectives

• Governor Josh Stein has been a strong supporter of the EITC, highlighting its role in reducing child poverty and helping working families. He encourages all eligible taxpayers to claim these credits and use free filing tools.
• The Institute on Taxation and Economic Policy (ITEP) points out that undocumented immigrants make large tax contributions but are often left out of tax credits. ITEP supports expanding credits like the EITC and CTC to ITIN filers to make the system fairer.
• The North Carolina General Assembly showed support for low-income workers by passing Senate Bill 211, but has not yet expanded eligibility to undocumented immigrants or ITIN filers.

Future Outlook and Pending Developments

• Possible Expansion of State EITC: While North Carolina has not yet expanded the EITC to ITIN filers, other states have done so. There is ongoing discussion in policy circles, and future legislation could change eligibility rules.
• Federal Policy Changes: National debates continue about making tax credits like the EITC and CTC available to more immigrants. If federal rules change, North Carolina’s state EITC could also become more inclusive.
• Ongoing Monitoring: Immigrants and advocates should keep an eye on updates from the North Carolina General Assembly and the IRS for any changes in eligibility or application processes.

Official Resources for More Information

• North Carolina Department of Revenue: For the latest on state tax credits and filing requirements, visit the official website.
• IRS Website: For federal EITC and Child Tax Credit eligibility and filing, see IRS EITC Information.
• North Carolina Housing Finance Agency: For affordable housing programs and the Low-Income Housing Tax Credit, visit their official page.
• Governor Josh Stein’s Office: For news and initiatives related to tax credits, check the governor’s official site.

Key Takeaways and Next Steps

• If you are an immigrant in North Carolina with a valid SSN, you can claim both the federal and state EITC, as well as the Child Tax Credit, if you meet the income and family size requirements. File your taxes on time and use free resources to help you claim all credits.
• If you are undocumented or use an ITIN, you are not eligible for these credits as of July 2025, but you should still file your taxes and watch for future changes.
• If you are a part-year resident or nonresident, check your eligibility for a prorated state EITC.
• Stay informed about policy changes at both the state and federal levels, as advocacy efforts may lead to expanded eligibility in the future.

As reported by VisaVerge.com, the reinstatement of the North Carolina state Earned Income Tax Credit through Senate Bill 211 marks a significant step in supporting working families, but there is still work to be done to ensure that all immigrants, regardless of status, can access these important benefits. For now, eligible immigrants should take full advantage of the credits available, while those currently excluded should continue to file taxes and stay alert for new developments.

For more details on filing requirements and eligibility, visit the North Carolina Department of Revenue, which provides up-to-date information and resources for all taxpayers in the state.

Learn Today

Earned Income Tax Credit (EITC) → A refundable tax credit to support low- and moderate-income workers based on earned income and family size.
Senate Bill 211 → Legislation passed in March 2025 reinstating North Carolina’s state EITC for the 2025 tax year.
Social Security Number (SSN) → A unique number issued to eligible workers required to claim federal and state tax credits.
Individual Taxpayer Identification Number (ITIN) → A tax processing number for individuals not eligible for SSNs, ineligible for most tax credits.
Child Tax Credit (CTC) → A federal tax credit that provides up to $2,000 per qualifying child for taxpayers with valid SSNs.

This Article in a Nutshell

North Carolina reinstated the state Earned Income Tax Credit for 2025, benefiting eligible immigrant families with valid SSNs. Undocumented immigrants and ITIN users cannot claim these credits but must file taxes. Free filing tools help maximize benefits while ongoing discussions may expand eligibility in future years.
— By VisaVerge.com