On December 9, 2011, the House passed legislation that pays for the payroll tax cut to middle-class households by denying a child tax credit to immigrant families. Immigrant families, in many cases households with U.S. citizen children, are among the many taxpayers who do not have Social Security Numbers and pay their taxes through the use of an Individual Taxpayer Identification Number (ITIN). In 2010, ITIN taxpayers contributed more than $9 million into Social Security and Medicare.
The House of Representatives has proposed excluding families who pay their taxes with an ITIN from receiving the Additional Child Tax Credit (ACTC). This credit offers up to a $1,000 tax break for millions of parents to offset the costs of raising children and to reduce child poverty. A family can claim up to $1,000 per child, which makes an immense impact in helping low-income families make ends meet and helped lift 2.3 million people, including 1.3 million children, above the poverty line in 2009.
In most instances, ITIN filers are low-income families already struggling to pay their bills, as over 60% of families receiving this credit earn less than $25,000 per year. This modification to the ACTC would target approximately 4 million U.S. citizen children being raised in 2 million immigrant households. Families would experience immediate hardship with fewer funds for basic necessities such as groceries, utility bills and childcare.
Congress is currently considering this particular cut to pay for the long-term extension of a payroll tax cut and unemployment insurance. In upcoming negotiations, lawmakers should protect immigrant taxpayer eligibility for the ACTC and oppose measures that would create a financial burden for immigrant children and families. Visit the LIRS Action Center to urge your members of Congress to protect immigrant children from poverty.