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 Although it is referred to as a “refundable credit,” the new
CTC, like the old additional child tax credit (ACTC) it replaces, pays cash to
low-income families who do not pay any federal income tax. The new program
significantly increases the maximum cash payment from $1,400 per child to $3,600
for children under 6, and to $3,000 for children ages 6 to 17. After 2022, the
maximum payment would be $2,000 per child, but advocates hope the much larger
payments will be extended.
In an analysis conducted in October, my colleague Karen Zeigler and I estimated
that illegal immigrants with U.S.-born children would receive $8.2 billion from
the new CTC. However, we had assumed that the new program, like the old ACTC,
would require children claimed as dependents to have Social Security numbers (SSNs).
But reconciliation (page 1452, line 14) would permanently repeal this
requirement.
Illegal immigrants are able to receive benefits on behalf of their U.S.-born
children, who are American citizens. In the case of the old ACTC, they simply
acquired an individual taxpayer identification number, which is not hard, and
then claimed their payment. In practice, only illegal immigrants with U.S.-born
children could receive payments under the old system, since as American citizens
those U.S.-born children receive SSNs. The permanent elimination of the SSN
requirement means that even illegal immigrants whose children are also illegally
in the country can receive the new expanded credit.
If the reconciliation bill is passed, we now estimate illegal immigrants whose
children are also illegally in the country will receive $2.3 billion from the
new CTC, for a total of $10.5 billion in cash payments to illegal immigrant
parents. This includes illegal migrants here in 2020 and those stopped and then
released into the country in 2021. These payments are not related to the huge
cash settlements the administration is planning to pay illegal immigrant
families separated at the border during the Trump administration.
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Receipt of payments under the new CTC would be all the easier because
reconciliation also eliminates the work requirement of the old ACTC for next
year. In the past, some illegal immigrants who worked off the books sometimes
had trouble demonstrating employment income. Dropping the work requirement makes
it even simpler for them to receive payments.
These payments represent an enormous inducement to illegal immigration. We
estimate that 78% of illegal immigrants with children have income low enough to
receive cash payments averaging $5,300 per family, or about $2,600 per child
next year. To place these numbers in perspective, the median income in the
current top illegal immigrant-sending countries of Honduras, Guatemala, and El
Salvador is $3,000 to $4,000 a year. The cash payment we are offering to
virtually anyone who arrives with a child, whether they work in the United
States or not, is roughly equal to – or in some cases exceeds – what migrants
could earn in their home countries in one year.
In addition to creating large costs for taxpayers and encouraging illegal
immigration, the elimination of the SSN requirement would seem to be an
invitation to fraud, as tax filers now simply need to provide a name and date of
birth for a child. The only other requirement is that they check a box on their
returns indicating they lived in the United States for half a year, though there
is no enforcement mechanism for this provision. Partly in response to a 2011
report from the Inspector General for Tax Administration showing that illegal
immigrants made extensive use of tax credits, Congress included provisions in
both the 2015 PATH Act and the 2017 Tax Cuts and Jobs Act designed to restrict
illegal immigrant receipt of such programs. This included the requirement that
the qualifying child have an SSN. The budget reconciliation effectively undoes
those changes.
To be sure, most illegal immigrants who come to America do in fact work. But the
welfare benefits we give to them certainly incentivizes even more illegal
immigration. The list of things we have failed to do to enforce our immigration
laws is so long that it can’t even be summarized here. But if we want to
understand why a record 1.7 million people were apprehended at the border in FY
2021, we need to look no further than the large cash payments the House plans to
give illegal immigrants.
Steven Camarota is director of research at the Center for Immigration Studies in
Washington, D.C. |
