GOP Tax Reform Still Lets Illegal Immigrants Receive Child Credit Subsidy


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Will Racke Immigration and Foreign Policy Reporter
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The Republican tax reform bill would still allow illegal immigrants to claim a key tax credit, despite earlier calls from conservative lawmakers to end what they say is a multi-billion dollar annual reward for lawbreakers.

Under both the House and Senate versions of the Tax Cuts and Jobs Act, illegal immigrants with taxpayer identification numbers may claim the child tax credit for any of their U.S.-born children.

The original version of the Republican tax bill introduced in the House Ways and Means Committee stipulated that the refundable credit would not be available unless the “taxpayer includes the taxpayer’s Social Security number on the return of tax for such taxable year.” In other words, illegal immigrants, who don’t have legitimate social security numbers, would be ineligible for the credit, regardless of their children’s citizenship status.

When the bill was marked up in committee, though, the provision was amended with language mandating only that the qualifying child have a social security number, not the taxpayer. The amended language allows illegal immigrants to continue claiming the credit, which would be doubled to $2,000 per child, for their U.S. citizen children.

The little-noticed modification to the GOP tax bill largely preserves a tax policy that conservative immigration reformers have been trying change for several years. Critics of paying child tax credits to illegal aliens say the practice invites fraudulent claims and amounts to a multi-billion dollar subsidy for people who have broken U.S. immigration laws.

They also argue the credit itself is a magnet for illegal immigration, a claim the U.S. Treasury Inspector General for Tax Administration supported in a 2011 report.

“The payment of Federal funds through this tax benefit appears to provide an additional incentive for aliens to enter, reside, and work in the United States without authorization,” TIGTA wrote.

A 1996 law makes illegal aliens “not eligible for any federal public benefit,” but the IRS has interpreted the law to mean that a tax filer only has to show a taxpayer identification number to receive the child tax credit. That interpretation translates to a huge subsidy: In 2013, 4.4 million filers using a taxpayer identification number claimed child tax credits worth $6 billion, according to a 2013 GAO report.

The GOP tax bill as currently written misses an opportunity to clarify eligibility requirements for the child tax credit, according to Jan Ting, a law professor and board member of the Center for Immigration Studies.

“On the campaign trail, Donald Trump spoke of the ‘tremendous costs’ illegal aliens pose to the country through ‘abuse [of] our welfare system,'” he wrote in a blog post Monday. “Unfortunately, for reasons that are unclear, Republicans changed the Tax Cuts and Jobs Act in order to continue to permit the IRS to pay billions of dollars every year to illegal aliens through the child tax credit.”

Even with the softer eligibility requirements, the bill does include a change to the child tax policy was proposed in the original committee version. Under the revised language, legal and illegal immigrants must provide a social security number for each child they use to claim the credit, which is likely to cut down on fraudulent child tax credit claims.

Many illegal immigrants fraudulently claim the child tax credit for dependents living in other countries, contributing to billions of dollars worth of improper payments each year.

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