The tax legislation approved by both the House and Senate provides slightly improved benefits for parents, unless their children are undocumented immigrants.
Currently, non-citizens who file taxes with an Individual Taxpayer Identification Number, or ITIN, can claim the child tax credit, which refunds up to $1,000 for each child under the age of 17. In 2013, the Government Accountability Office reported that 4.4 million ITIN filers claimed child tax credits totaling $6 billion.
Under both the House and Senate versions of the Republican tax plan, ITIN filers—who are predominantly undocumented—would be required to present Social Security numbers for every child to qualify for the refundable portion of the credit, which applies when the credit surpasses the filer’s total tax due. The Senate bill would also mandate a Social Security number for the standard credit.
Samantha Vargas Poppe of UnidosUS, a Latino advocacy organization, states that this change would directly affect approximately one million undocumented children. Additionally, it could negatively impact U.S.-born children whose non-citizen siblings would lose access to the credit, causing financial strain on the entire family.
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“These credits help families stay out of poverty,” Poppe emphasizes. “It’s not a matter of immigration enforcement; these are children.”
In 2010, undocumented immigrants and their employers contributed about $13 billion in payroll taxes, based on the latest figures from the Social Security Administration. Many also pay Social Security taxes, sales taxes, and property taxes, yet they are ineligible for most federal programs like Social Security, Medicare, Medicaid, or subsidies under the Affordable Care Act.
For American citizens, the House bill raises the child tax credit from $1,000 to $1,600, while the Senate bill increases it to $2,000. Both bills also elevate the income thresholds for taxpayers eligible to claim the credit.
Moreover, the House bill tightens the criteria for the Earned Income Tax Credit, meaning that immigrants covered by the Deferred Action for Childhood Arrivals program would be unable to receive the credit once their work authorization expires. The Trump administration announced in September its intent to end the program, meaning these immigrants will lose their protected status over the coming years unless Congress intervenes.
Additionally, the House bill requires a Social Security number for the American Opportunity Tax Credit, which amounts to $2,500 annually to cover the first four years of higher education costs. In 2013, ITIN filers utilized this credit for a total of $204 million.
The Senate bill, however, does not amend these credits.
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Conservatives have long advocated for these limitations, citing the need to prevent tax fraud. The Center for Immigration Studies, which opposes immigration, has claimed that permitting undocumented immigrants to receive refundable tax credits contravenes the welfare reforms of 1996 that barred such benefits for undocumented individuals.
Earlier this year, Luke Messer, a Republican representative from Indiana, proposed legislation to eliminate the eligibility of ITIN filers for the child tax credit.
“We cannot continue to reward individuals who immigrate to our country unlawfully, while those who adhere to the rules struggle to advance,” he stated in an October press release advocating for the bill’s inclusion in tax reform discussions.
Democrats and numerous immigrant rights organizations contend that excluding undocumented children from the child tax credit will exacerbate child poverty.
Correction: Luke Messer is a Republican representative from Indiana. An earlier iteration of this article incorrectly stated he represented Illinois.
