Taxes & DACA: What do I need to know?


Tax season is in full swing! Now that you have DACA (and new job opportunities), you need to make sure you file your taxes! Don’t forget, the filing deadline is April 15.

Our Resources:

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Taxes & DACA

I have DACA. Am I required to file taxes?
YES! You are obligated by law to file taxes. It may also help you in the future with your immigration case if
you ever need to show compliance with tax requirements, proof of your income, or prove your physical
presence in the United States.

Is there any risk in filing taxes as a DACA-mented Dreamer?
No, you should not be scared of filing your taxes. You will not be turning yourself in to the government by
doing so. There are confidentiality protections that keep information submitted to IRS private and that
cannot be shared with immigration enforcement agencies. You are safe!

SSN or ITIN? Which do I use?
If you have DACA and have a Social Security Number (SSN), then you MUST use the SSN to file your taxes. If
you had been using an ITIN before you received DACA, you must stop using it to file taxes.

What do I do need to do once I receive a valid SSN?
If you have been using an ITIN previously, you must:

Write to the IRS ITIN unit to inform them that you are no longer using your ITIN. Here is a guide with
more info on what to do: www.lclaa.org/lclaa-blog/entry/post-daca.
● Amend any past returns if they included any incorrect information.
● If you meet all the eligibility criteria for the Earned Income Tax Credit, apply for it for up to three
prior years.

NOTE: Payment of back taxes are NOT REQUIRED for DACA (or DAPA—though discretionary).


 

The Affordable Care Act (also known as “Obamacare”) and Taxes

The Affordable Care Act (ACA), also known as “Obamacare,” established health insurance marketplaces to
make it easier for people to buy health insurance. A provision in the ACA, known as the “individual mandate,”
requires that all “eligible” people get health coverage or pay a financial penalty. But there are some
important exceptions to this requirement, including one for undocumented and DACA-mented youth.

I have DACA. Do I qualify for Obamacare? Who qualifies?
● NO. Unfortunately, DACA recipients are not eligible for Obamacare because they are not considered
lawfully present for purposes of the ACA. DACA recipients are therefore considered “exempt
noncitizens” and do NOT need to have insurance and are NOT required to pay the penalty.
● However, because DACA-mented youth are often part of mixed-status families, it is important to
remember that DACA recipients may apply for Obamacare coverage on behalf of eligible family
members and may be counted in household size.

I have DACA. Do I have to pay the tax penalty for not having insurance?
● NO. People who are not eligible for Obamacare do not have to pay the financial penalty. This means
that if you have DACA, you are not required to have health insurance and also that you are not
subject to the tax penalty.

I am not eligible for Obamacare because I have DACA. What should I do to be exempt from the tax
penalty?

● To claim the exemption and avoid paying the tax penalty for not having insurance, you must
complete IRS Form 8965 and file it along with your federal income tax return (1040).
● You must indicate exemption “code C” on the Form 8965, which is meant for people who are not
“lawfully present.” You should also indicate that you were exempt for the entire year.
● Claiming this exemption will not require you to disclose your immigration status, as the code “C”
exemption captures several groups of people who are not eligible for the ACA.
● If you are not required to file tax returns because your income is too low, you do not need to do
anything to claim your exemption.

What if I have DACA and already paid the tax penalty?
If you have DACA and were told you needed to pay the tax penalty, you should file an amended return (Form
1040X) along with a completed Form 8965. You will need to claim the exemption on Form 8965.

More information on immigration status and health care:
FAQ – Immigrants, ACA, and Taxes
Immigrants & Exemptions from the Individual Mandate
DACA and DAPA Access to Federal Health and Economic Support Programs


 

Say What? Tax Forms and Terms Explained

Tax Form Explanation
Form W-4 (Employee’s
Withholding Allowance
Certificate)
You fill this out after you are hired for a new job. It determines the correct
amount of taxes to withhold and shows your dates of employment and the
amount you paid into Social Security and Medicare.
Form W-2 (Wage and
Tax Statement)
You get this from your employer by the end of January of each tax year. It shows
wages, income taxes withheld, and payroll taxes (Social Security and Medicare
withholdings) from the prior year. Your employer is required by law to provide
it to you.
Form 1040 (U.S.
Individual Income Tax
Return)
The standard Individual Federal Income Tax form for filing your taxes. There
are several types of Individual Tax Income forms (1040). To figure out which
1040 you should file, see the table immediately below.

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Check out this IRS guide for more info: www.irs.gov/uac/Newsroom/Which-Tax-Form-Should-You-File

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Exemptions, Dependents and Tax Credits
● Earned Income Tax Credit (EITC):
○ Only SSN-holders (both parents and qualifying child) can apply.
○ Maximum 2014 credit is $496 for a taxpayer with no qualifying children and $6,143 for a taxpayer with 3+ qualifying children.
● Child Tax Credit (CTC) and Additional Child Tax Credit (ACTC):
○ ITIN-holders are eligible (up to $1,000 credit for each qualifying child for which a dependency exemption has been claimed).
○ NOTE: “Qualifying child” under CTC/ACTC includes only U.S. citizens, U.S. residents (known as green card–holder), and U.S. nationals.

Where and how can I file?
There are many options for how to file your taxes.
File on your own
Free File from the IRS
Turbo Tax
Tax Act
H+R Block Online
● The VITA Volunteer Income Tax Assistance Program offers free, in-person tax help for people whose
income is under $53,000 or who are disabled, elderly, or a limited English speaker.
Find a VITA site near you
Paid in-person tax preparers
H+R Block
Liberty Tax
Jackson Hewitt Tax Service