Key Takeaways
• House Bill 820 proposes a Pennsylvania state EITC equal to 30% of the federal credit, pending Senate approval.
• Federal EITC and Child Tax Credit require valid Social Security numbers, excluding most undocumented immigrants.
• Pennsylvania offers education tax credits for businesses and a resident credit to avoid double state taxation.
As of July 2025, immigrants living and working in Pennsylvania face a changing landscape when it comes to tax benefits and credits. Several important updates, proposed laws, and ongoing debates are shaping what support is available for immigrant families, especially those with low or moderate incomes. This update explains what has changed, who is affected, what actions are needed, and what these developments mean for pending applications and future tax years.
Summary of What Changed
The most significant update for 2025 is the progress of House Bill 820, a proposed law that would create a Pennsylvania Earned Income Tax Credit (EITC) at the state level. If passed, this law would give eligible taxpayers a credit equal to 30% of the federal EITC. As of July 2025, House Bill 820 has passed the Pennsylvania House of Representatives but has not yet become law. This means that, for now, there is still no state-level EITC in Pennsylvania, but this could change soon if the Senate approves the bill and it is signed into law.
At the federal level, the rules for the Earned Income Tax Credit and the Child Tax Credit remain the same. Both credits require a valid Social Security number, which means undocumented immigrants are generally not eligible. Pennsylvania also does not have its own child tax credit, but there are other state programs that may indirectly help immigrant families, such as tax credits for businesses that support education.
Who Is Affected
These updates and programs affect several groups of immigrants in Pennsylvania:
- Lawfully present immigrants with a valid Social Security number: These individuals may qualify for the federal EITC and Child Tax Credit if they meet income and family requirements. If House Bill 820 becomes law, they could also benefit from a new state-level EITC.
- Undocumented immigrants: Most federal and state tax credits, including the EITC and Child Tax Credit, are not available to undocumented immigrants because they require a valid Social Security number. This remains a major barrier.
- Immigrant families with children: While there is no state child tax credit, families may benefit from the federal Child Tax Credit if eligible, and from educational programs supported by business tax credits.
- Immigrants paying taxes in more than one state: Pennsylvania residents who pay income tax to another state may claim a resident credit to avoid double taxation.
Effective Dates
- Federal EITC and Child Tax Credit: These credits are available every tax year, following the rules set by the Internal Revenue Service (IRS).
- House Bill 820 (Proposed State EITC): As of July 2025, this bill has not yet become law. If enacted, it would likely take effect for the next tax year after passage. Taxpayers should watch for updates from the Pennsylvania Department of Revenue.
- Other State Programs: Tax credits for education and the resident credit for taxes paid to other states are ongoing programs with no recent changes to eligibility or application procedures.
Required Actions for Immigrants
To make the most of available tax benefits and prepare for possible changes, immigrants in Pennsylvania should take the following steps:
1. Check Your Eligibility
– Review your immigration status and make sure you have a valid Social Security number. This is required for most federal and state tax credits.
– Check your income and family size to see if you qualify for the federal EITC or Child Tax Credit. The IRS provides an EITC Assistant tool to help you determine eligibility.
– If House Bill 820 becomes law, check the Pennsylvania Department of Revenue website for updated eligibility rules for the new state EITC.
2. Gather Required Documents
– Collect your Social Security card, W-2 forms, 1099 forms, and any other documents showing your income.
– If you have children, gather their Social Security numbers and birth certificates.
– If you paid taxes to another state, keep records of those payments for the resident credit.
3. File Your Taxes
– Use IRS Form 1040 to file your federal taxes and claim the EITC or Child Tax Credit if eligible. You can find the latest version of Form 1040 here.
– File your Pennsylvania state tax return using the PA-40 form. If House Bill 820 passes, look for new instructions on how to claim the state EITC.
– If you paid taxes to another state, complete the Resident Credit section on your PA-40 form.
4. Seek Assistance
– Many community organizations and tax clinics offer free help with tax filing, especially for immigrants and low-income families.
– The Pennsylvania Department of Revenue provides resources and guidance on its official website.
– Consider speaking with a tax professional if you have questions about your eligibility or need help with complex tax situations.
Implications for Pending Applications
If you are waiting to file your 2025 taxes or are hoping to claim new credits, here’s what you need to know:
- Federal Credits: The rules for the federal EITC and Child Tax Credit are set for the 2025 tax year. If you qualify, you can claim these credits when you file your taxes in early 2026.
- State EITC (House Bill 820): Because the bill has not yet become law, you cannot claim the Pennsylvania EITC for the 2025 tax year. If the law passes before the next tax season, the Department of Revenue will provide new forms and instructions.
- Resident Credit: You can continue to claim the resident credit for taxes paid to another state as usual.
Detailed Overview of Key Tax Credits and Programs
Federal Earned Income Tax Credit (EITC)
The federal EITC is a refundable tax credit for low-to-moderate-income workers. To qualify, you must:
- Have a valid Social Security number
- Earn income from work (wages, self-employment, etc.)
- Meet income limits based on your family size
The EITC can reduce the amount of tax you owe and may result in a refund. For example, a family with two children and an income below a certain threshold could receive several thousand dollars back. However, undocumented immigrants are not eligible because they cannot get a valid Social Security number.
Pennsylvania State EITC (Proposed by House Bill 820)
House Bill 820 would create a state-level EITC equal to 30% of the federal EITC. This means if you receive $2,000 from the federal EITC, you could get an additional $600 from the state. The bill has passed the House but is still waiting for approval in the Senate and the governor’s signature. If passed, this credit would help many low-income families, including eligible immigrants, by putting more money back in their pockets.
Federal Child Tax Credit
The federal Child Tax Credit helps families with children by reducing their tax bill. To qualify, you must:
- Have a qualifying child under age 17
- Have a valid Social Security number for each child
- Meet income limits
Like the EITC, undocumented immigrants cannot claim this credit because of the Social Security number requirement.
Pennsylvania State Child Tax Credit
Pennsylvania does not have its own child tax credit. However, if House Bill 820 passes, the new state EITC could indirectly help families with children by increasing the total amount of credits they receive.
Other State-Level Programs
Education Tax Credits for Businesses
Pennsylvania offers tax credits to businesses that donate to approved scholarship organizations, educational improvement organizations, or pre-kindergarten scholarship organizations. While these credits are for businesses, they can help immigrant families by supporting scholarships and educational programs that their children may use.
Resident Credit for Taxes Paid to Another State
If you live in Pennsylvania but work in another state and pay income tax there, you can claim a credit on your Pennsylvania tax return. This prevents you from being taxed twice on the same income. The credit is limited to the lesser of the tax paid to the other state or a percentage of the income taxed by Pennsylvania.
Policy Impact and Stakeholder Perspectives
For Immigrants
The lack of a state-level EITC and child tax credit in Pennsylvania has made it harder for low-income immigrant families to get the same support as families in other states. If House Bill 820 becomes law, it could provide much-needed relief. However, the requirement for a valid Social Security number still excludes many undocumented immigrants.
For Advocates
Many groups that support immigrants and low-income families are pushing for more inclusive tax policies. They argue that everyone who works and pays taxes should be able to benefit from credits like the EITC, regardless of immigration status.
For Legislators
Supporters of House Bill 820 see the state EITC as a way to help working families, reduce poverty, and boost the economy. Opponents may worry about the cost to the state budget.
For Businesses
While businesses cannot claim the EITC, they can benefit from education tax credits. By supporting scholarship programs, businesses can help immigrant families access better educational opportunities for their children.
Historical Background and Future Outlook
The federal EITC was created in 1975 to help low-income workers and reduce poverty. Many states have since created their own EITCs, but Pennsylvania has not yet done so. House Bill 820 represents a major step toward joining other states in offering this support.
Looking ahead, the fate of House Bill 820 will be important for many families. If the bill passes, eligible immigrants with valid Social Security numbers could see a significant increase in their tax refunds. However, unless federal or state laws change, undocumented immigrants will remain excluded from most tax credits.
Practical Guidance and Next Steps
- Stay Informed: Watch for updates on House Bill 820 from the Pennsylvania Department of Revenue and local news sources.
- Prepare Early: Gather your documents and check your eligibility for federal credits before tax season.
- Get Help: Use free tax clinics or professional services if you need assistance.
- Advocate: If you believe tax credits should be more inclusive, consider joining advocacy groups or contacting your state representatives.
Official Resources
For the most current information on Pennsylvania tax credits, visit the Pennsylvania Department of Revenue.
Conclusion
Immigrants in Pennsylvania face both opportunities and challenges when it comes to tax benefits. The federal Earned Income Tax Credit and Child Tax Credit offer important support for those with valid Social Security numbers, but many immigrants are left out due to strict eligibility rules. The proposed state EITC under House Bill 820 could provide new help for eligible families, but its future is still uncertain. According to analysis by VisaVerge.com, staying informed and prepared is the best way for immigrant families to make the most of available tax credits and to respond quickly if new laws are passed. By understanding the rules, gathering the right documents, and seeking help when needed, immigrants can take important steps to support their families and build a better future in Pennsylvania.
Learn Today
Earned Income Tax Credit (EITC) → A refundable federal credit aiding low-to-moderate-income workers who meet income and family size requirements.
House Bill 820 → Proposed Pennsylvania law creating a state EITC worth 30% of the federal EITC to support eligible taxpayers.
Social Security Number → A unique identifier required by the IRS to qualify for federal and certain state tax credits.
Child Tax Credit → A federal tax credit reducing tax bills for families with qualifying children under 17 and valid SSNs.
Resident Credit → A state tax credit preventing double taxation for Pennsylvania residents who pay income tax in other states.
This Article in a Nutshell
In Pennsylvania, immigrants with valid Social Security numbers may soon benefit from a new state EITC if House Bill 820 passes. Meanwhile, federal tax credits remain unchanged. Undocumented immigrants face exclusion, but education business credits and resident tax credits still provide limited support for immigrant families statewide.
— By VisaVerge.com
