As tax time is approaching, and the next round of negotiations regarding the payroll tax cuts are gearing up, a bill to deny the Child Tax Credit for those filing with an individual taxpayer identification number (ITIN) is also moving in Congress. The bill, titled Refundable Child Tax Credit Eligibility Verification Reform Act, would require a Social Security number to receive a cash refund through the Child Tax Credit. Currently, those filing with an ITIN can also receive the child tax credit. This has been proposed as a way to fund the payroll tax cut.The Child Tax Credit is for families with children under 17 that meet various other requirements. It is worth up to $1,000 in tax credits per child and it may be partially refundable for some low-income families. The Child Tax Credit is important for preventing many families with children from slipping into poverty. According to the Center on Budget and Policy Priorities, the Child Tax Credit protected 1.3 million children from poverty in 2009.
Unfortunately, this harmful bill is working its way through Congress. The measures passage would mean that tax-paying immigrants who use ITINs and their children will be at a heightened risk for falling below the poverty line. About 80 percent of the families who will be affected are Latino. It also will have an impact on mixed-status families who may have U.S. citizen children, but the parents or guardians are either documented residents or undocumented. Families using ITINs paid $9 billion in taxes in 2010 – they are paying into the system and the Child Tax Credit simply helps families to make ends meet.
Low-income families are already forced to make extremely difficult financial decisions. While the payroll tax cut is important, it makes no sense to fund such a measure by putting low-income immigrant families and children at more risk. There has to be a better solution.
Read the New York Times editorial about the Refundable Child Tax Credit Eligibility Verification Reform Act and the fact sheet about the possible consequences from the National Council of La Raza.
Julie Davidson
