August 14, 2012
While America should not be a nation of dependency, there does need to be a safety net for families and individuals struggling to make ends meet. One such program is the refundable child credit, which provides cash payment to low-income parents who pay no income tax. For example, a family earning $16,000 a year with two children would receive more than $7,000 in combined cash payments.
These payments are considered means-tested welfare programs as they aim to reduce the amount of income tax a family owes.
While these credits can be a great relief for struggling American families, there is mounting evidence that many illegal immigrants living in the United States are claiming these cash credits for their children.
Heritage’s tax expert Curtis Dubay explains the scope of the problem:
The extensive and rapidly growing problem is that illegal immigrants who reside in the U.S. are able to acquire ITINs (Individual Taxpayer Identification Number) from the IRS and then use those identifiers to file tax returns on which they claim the child tax credit and its refundable payment. A study from the Treasury Inspector General for Tax Administration reports that the number of ITIN filers claiming refundable payments nearly doubled between 2005 and 2008 from 796,000 to 1,526,276.
Conservative estimates show the federal government will spend $7.6 billion over 10 years on child tax credit payments to illegal immigrants.
But relief is in sight, the House has introduced a bill requiring proof of a social security number in order to receive the child tax credit.
The government should not reward illegal immigration by providing illegal immigrants with cash welfare aid through the refundable child credit. The purpose of the refundable child tax credit is to help low-income working families that are legal citizens or authorized to work in the U.S.
What do you think about the Child Tax credit?