Save the Child Tax Credit for Hardworking Families
December 14 2011
By Eric Rodriguez, Vice President, Office of Research, Advocacy and Legislation, NCLR
For several months, we have been bracing for an attack on immigrant families who earn the Child Tax Credit. Over the past few days, Republican lawmakers have made clear that no matter is too urgent or too serious for them to resist going back to the anti-immigrant playbook to score political points. This time, in what should be a straightforward order of business for Congress to complete before the holidays—extending the payroll tax cut and unemployment benefits—they have gone out of their way to hurt citizen children of immigrants through unprecedented changes to the tax law.
On Friday, December 9, 2011, House Republicans introduced a tax plan that includes a provision (H.R. 3630, Section 5201) to prevent immigrant families from accessing the refundable Child Tax Credit. The House passed this tax plan, including the anti-immigrant provision, on Tuesday, December 13. The proposal would affect two million families, driving them deeper into poverty. Moreover, four million children who will be hurt by the Republican tax provision are U.S. citizens. NCLR supports the extension of the payroll tax cut, but is outraged that congressional leaders would pay for it by taking $9 billion out of the pockets of hardworking and mostly poor immigrants who are raising families.
Now we are fighting to prevent the House Republicans’ provision from becoming part of the final tax package that Congress must pass in the coming days. Click here to send a letter to your senators urging them to exclude this harmful provision.
Here’s the background on this issue: signs of trouble began this past summer when the Inspector General from the U.S. Department of the Treasury issued a misleading report insinuating that there was something amiss with eligible immigrants receiving the refundable Child Tax Credit. The report focused on people who pay their taxes using an ITIN (Individual Taxpayer Identification Number). ITINs are commonly used by immigrants who lack a Social Security number so that they can pay their share of income, Social Security, and Medicare taxes. In 2010, ITIN tax filers paid more than $9 billion in payroll taxes to support Social Security and Medicare.
As clarified by IRS experts at a congressional hearing on this issue, it is legal for ITIN taxpayers to receive the refundable Child Tax Credit if they meet the eligibility requirements for the tax credit. The Republican tax plan would make this illegal by requiring that recipients of the refundable credit have a Social Security number.
Worse yet, the House tax bill targets only the families who are eligible for the refundable part of the Child Tax Credit—in other words, it inflicts pain on the poorest families. Sixty-three percent of families who use the refundable Child Tax Credit earn less than $25,000 per year. Almost half of the financial harm from this provision will fall on workers who are raising children on hourly wages of $10 or less.
The Child Tax Credit is one of the most effective anti-poverty tools for working families in this country. It helps families who are working hard at low-paying jobs to survive and have enough income to raise the next generation of Americans. It is one of the only anti-poverty programs that is open to immigrant families. Closing off this source of assistance for low-income, working families will drive poverty levels in this country even higher.
NCLR urges Congress to pass an extension of the payroll tax cut that is fair and does not harm hardworking immigrants and their families. Add your voice to support for the Child Tax Credit, and click here to send a letter to your senators urging them to exclude this harmful provision.
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