2025 Tax Benefits and Credits for Immigrants in Alabama Explained

Key Takeaways

• Alabama offers no state Earned Income Tax Credit or child tax credit in 2025 for immigrants.
• Only immigrants with lawful status and valid SSNs can claim federal EITC and child tax credit.
• New 2025 laws increase immigration enforcement, possibly discouraging eligible immigrants from filing taxes.

As of July 10, 2025, immigrants living in Alabama face a unique set of rules and restrictions when it comes to tax benefits and credits. Recent changes in state law, ongoing federal requirements, and the absence of certain state-level programs all play a role in shaping what support is available. This update explains what has changed, who is affected, what actions are required, and what these developments mean for pending and future tax benefit claims—especially for the Earned Income Tax Credit, child tax credit, and other state-level programs.

Summary of What Changed

The main change for 2025 is that Alabama has not introduced any new state-level tax credits for individuals, including immigrants. The state still does not offer its own Earned Income Tax Credit (EITC) or child tax credit. Recent state tax reforms have focused on business incentives and making tax filing easier for mobile workers, but not on expanding benefits for immigrant families. At the same time, new laws have increased immigration enforcement, which may discourage some immigrants from filing taxes or claiming benefits they are eligible for.

Who Is Affected

• Immigrants with lawful status and valid Social Security Numbers (SSNs): These individuals can still claim federal tax credits, such as the federal EITC and child tax credit, if they meet all other requirements.
• Undocumented immigrants and those with only Individual Taxpayer Identification Numbers (ITINs): These individuals remain ineligible for both the federal EITC and child tax credit, and Alabama does not offer any state-level alternatives.
• Immigrant families with mixed status: If at least one parent or child lacks a valid SSN, the family may be excluded from federal credits.
• All Alabama taxpayers: No new state-level individual tax credits have been introduced for 2025.

Effective Dates

• State tax reforms: Most changes took effect at the start of the 2025 tax year.
• Senate Bill 63 (SB 63): Effective June 1, 2025, this law requires DNA and fingerprint collection for undocumented noncitizens in custody.
• Senate Bill 53 (SB 53): Effective October 1, 2025, this law requires local police to check immigration status and report suspected undocumented immigrants.

Required Actions

• Lawfully present immigrants with valid SSNs: Continue to file federal and state taxes as usual. Check eligibility for federal credits and claim them if qualified.
• Undocumented immigrants: Be aware that you remain ineligible for federal EITC and child tax credit, and Alabama does not offer state alternatives. Consider seeking legal advice before filing taxes, especially in light of new enforcement laws.
• All taxpayers: Stay updated on any future changes by checking the Alabama Department of Revenue’s official website and the IRS website for the latest information.

Federal and State Earned Income Tax Credit (EITC) in Alabama

No State EITC in Alabama

Alabama does not have its own Earned Income Tax Credit (EITC) in 2025. Some states offer a state EITC as a percentage of the federal EITC, but Alabama has not passed such a law. This means that residents—including immigrants—cannot claim a state EITC on their Alabama tax return.

Federal EITC Eligibility for Immigrants in Alabama

Immigrants in Alabama may still qualify for the federal EITC if they meet certain requirements:

• Valid Social Security Number (SSN): The taxpayer, spouse (if filing jointly), and any qualifying children must all have valid SSNs that are approved for work in the United States 🇺🇸.
• Residency: The taxpayer must be a U.S. citizen or a resident alien for the entire tax year. Resident aliens are people who have a green card or meet the IRS “substantial presence” test.
• Income and Filing Status: The taxpayer must meet income limits and file a federal tax return, usually using Form 1040 (available on the IRS official website).
• Undocumented immigrants and ITIN holders: People who do not have valid SSNs, including those who file taxes using an Individual Taxpayer Identification Number (ITIN), are not eligible for the federal EITC.

Recent Policy Context

Alabama’s 2025 tax reforms did not include any changes to EITC eligibility or create a state EITC. Advocacy groups have pointed out that recent anti-immigrant laws may make immigrants less likely to file taxes or claim benefits, even if they are eligible.

Child Tax Credit (CTC) for Immigrants in Alabama

Federal Child Tax Credit (CTC)

The federal child tax credit is available to taxpayers who have qualifying children with valid SSNs. The main rules are:

• Qualifying Child: The child must be under age 17 at the end of the tax year, be a U.S. citizen, U.S. national, or U.S. resident alien, and have a valid SSN.
• Taxpayer Eligibility: The taxpayer must have a valid SSN or ITIN, but the child must have a valid SSN to qualify for the credit.
• Undocumented immigrants: If a parent or child does not have a valid SSN, the family cannot claim the federal child tax credit.

The American Rescue Plan Act (ARPA) temporarily expanded the CTC, but the main eligibility rules about SSNs and lawful presence remain in place for 2025.

No State-Level Child Tax Credit in Alabama

Alabama does not offer its own child tax credit or any similar refundable credit for families with children. This means that immigrant families in Alabama can only rely on the federal CTC if they qualify.

Impact on Undocumented Immigrants

Undocumented immigrants and their families are generally excluded from both the federal EITC and the federal child tax credit. Some states have started to offer refundable credits to undocumented immigrants, but Alabama has not done so as of July 2025.

Other Alabama State-Level Tax Incentives and Credits

Alabama offers a few tax credits, but they are mainly for businesses or for people who contribute to certain educational programs. These credits are not designed for individual taxpayers or immigrants specifically.

• Career-Technical Dual Enrollment Credit: Taxpayers who donate to qualifying career-technical education programs can get a credit equal to 50% of their contribution, up to 50% of their tax bill and $500,000 per year. This credit is not based on immigration status.
• Investment Credit: Businesses that create jobs in Alabama may qualify for a credit of up to 1.5% of their investment. This is aimed at companies, not individuals.

These credits do not have special rules for immigrants and are not relevant for most individual taxpayers.

Recent Legislative and Policy Developments Affecting Immigrants

New Anti-Immigrant Laws in 2025

Two new laws passed in Alabama in 2025 have made the environment more difficult for immigrants:

• Senate Bill 53 (SB 53): Starting October 1, 2025, local police must check the immigration status of people they suspect are undocumented and report them to federal authorities. This is sometimes called a “show me your papers” law.
• Senate Bill 63 (SB 63): Starting June 1, 2025, police must collect DNA and fingerprints from undocumented noncitizens who are in custody.

These laws may make immigrants—especially those without legal status—less likely to file taxes or claim benefits, even if they are eligible. Fear of enforcement or deportation can discourage participation in public programs.

Tax Compliance and Filing

Alabama’s 2025 tax reforms made it easier for mobile workers to file taxes, but did not create new credits or help for immigrants. Immigrants with valid SSNs and lawful status can still file taxes and claim federal credits. Undocumented immigrants face more barriers and risks.

Implications for Pending and Future Applications

• No new state-level credits: Immigrants who were hoping for a new Alabama Earned Income Tax Credit or child tax credit will not see these options in 2025.
• Federal credits still available for some: Lawfully present immigrants with valid SSNs can continue to claim the federal EITC and child tax credit if they meet all requirements.
• Undocumented immigrants remain excluded: There are no new options for undocumented immigrants to claim refundable tax credits in Alabama.
• Increased enforcement risks: The new laws may make some immigrants afraid to file taxes, even if they are eligible for federal credits. This could lead to fewer claims and less support for immigrant families.

Practical Guidance for Immigrants in Alabama

If You Have Lawful Status and a Valid SSN:

• File your federal and state taxes as usual.
• Check your eligibility for the federal EITC and child tax credit. Use the IRS’s EITC Assistant to see if you qualify.
• Keep records of your income, SSNs, and any correspondence with the IRS.
• Be aware of your rights: If you are stopped by police or asked about your immigration status, know your rights and consider seeking legal advice.

If You Are Undocumented or Have Only an ITIN:

• Understand that you are not eligible for the federal EITC or child tax credit.
• Alabama does not offer any state-level alternatives.
• Consider the risks of filing taxes under new state laws. You may want to consult with an immigration attorney or a trusted advocacy group before filing.

For All Immigrants:

• Stay informed: Laws and policies can change. Check the Alabama Department of Revenue for updates.
• Seek help if needed: Local immigrant advocacy groups and tax assistance programs can help you understand your options and rights.

Expert Perspectives and Outlook

• Tax Foundation (2025): Alabama’s recent tax reforms focus on making the state more competitive for businesses and workers, but do not address the needs of immigrants or expand individual tax credits.
• Institute on Taxation and Economic Policy (ITEP): Points out that undocumented immigrants pay taxes but are excluded from the EITC and child tax credit, which can make it harder for these families to get ahead.
• Alabama Immigrant Advocacy Coalition: Warns that new laws may lead to more racial profiling and discourage immigrants from taking part in the economy or claiming benefits they are entitled to.

As reported by VisaVerge.com, these developments highlight the ongoing challenges immigrants face in Alabama when it comes to tax benefits and credits. The lack of state-level support, combined with strict federal rules and new enforcement laws, means many immigrant families will continue to struggle to access the help they need.

Key Takeaways and Next Steps

• Alabama does not offer a state Earned Income Tax Credit or child tax credit in 2025.
• Federal EITC and child tax credit are available only to immigrants with lawful status and valid SSNs.
• Undocumented immigrants are excluded from these credits and have no state-level alternatives.
• Recent state laws have increased enforcement and documentation requirements, which may discourage immigrants from filing taxes or claiming benefits.
• Stay informed and seek help if you are unsure about your eligibility or rights.

For more information on tax credits and eligibility, visit the IRS official page on credits and deductions for individuals. For updates on Alabama tax laws and programs, check the Alabama Department of Revenue.

Immigrants in Alabama should pay close attention to both federal and state developments, keep good records, and seek trusted advice when needed. While the current environment presents many challenges, knowing your rights and responsibilities is the best way to protect yourself and your family.

Learn Today

Earned Income Tax Credit (EITC) → A federal tax credit reducing tax owed for low- and moderate-income working individuals and families.
Social Security Number (SSN) → A unique nine-digit number issued to citizens and eligible residents for tax and identification purposes.
Individual Taxpayer Identification Number (ITIN) → A tax processing number for individuals ineligible for SSNs, mostly undocumented immigrants.
Child Tax Credit (CTC) → A federal credit providing tax relief for taxpayers with qualifying children under 17 years old.
Senate Bill 53 (SB 53) → 2025 Alabama law requiring local police to check immigration status and report suspected undocumented immigrants.

This Article in a Nutshell

Alabama immigrants face stricter tax rules in 2025. Only lawful residents with valid SSNs can claim federal credits. No state-level benefits exist. New laws increase enforcement risks, potentially reducing eligible tax claims. This challenges immigrant families seeking financial support amid tax reforms focusing on businesses rather than individual benefits.
— By VisaVerge.com