Just Taxes Blog by ITEP

Trump Budget Plan Would Eliminate Child Tax Credits for Working Families Due to Parents’ Immigration Status


May 23, 2017

Misha Hill
Misha Hill
State Policy Fellow

The budget proposed by the Trump Administration today is rightly receiving broad criticism for dismantling supports for low-income families. Low-wage workers who rely on SNAP to put food on the table or Medicaid for health care, disabled people who no longer have the capacity to work, and poor students who need financial assistance to obtain higher education are all targets.

The administration also is remaining true to its commitment to unduly single out immigrant families. The budget states, “Spending on the Earned Income Tax Credit [EITC] and Child Tax Credit [CTC] would also be reduced by $40 billion, in part by requiring proof that recipients are authorized to work in the U.S.” In other words, the administration intends to prevent undocumented immigrants from claiming these two tax credits by requiring a Social Security number for filers (most undocumented immigrants currently file using an Individual Taxpayer Identification Number or ITIN).

This proposal is based on the misinformation that undocumented immigrants are unlawfully benefiting from the EITC and CTC. The IRS already requires a valid Social Security number (SSN) to qualify for and receive the EITC even if the worker has dependents who are U.S. citizens.  So, including the EITC in this list is really more of rhetorical point to stoke anti-immigrant sentiment than a proposed policy change.

Even more problematic is the targeting of the CTC, which is a benefit intended to support children.  Families with dependent children may claim the CTC , which is a partially refundable credit of up to $1,000 per child. The CTC already has specific requirements for a child to be qualified for the credit including age, citizenship and residence.  All U.S. citizen children should be entitled to the same benefits regardless of their parents’ immigration status. The credit, like all credits for children, is issued to the adult tax filer, but studies have shown that families receiving tax credits for children overwhelmingly use the boost in income to benefit their children.

And, as ITEP has detailed, undocumented immigrants are taxpayers, contributing close to $12 billion a year in state and local taxes while also paying federal payroll, income, and excise taxes.  In spite of these facts, Mick Mulvaney, President Trump’s budget director, has spread erroneous information to validate the administration’s cruel proposal to strip a proven anti-poverty benefit from undocumented immigrants and their children.  In an interview on Monday, Mulvaney said it’s not fair to give these credits to [someone] “who is in the country and working illegally. That’s just not fair. It’s not right, when you look at it through the perspective of the people who pay the taxes.”

Requiring proof of work authorization to claim the Child Tax Credit is a policy that directly hurts U.S. citizen children who have no control over their loved one’s immigration status. And, when combined with the rest of the administration’s proposal to cut taxes for corporations and the wealthy, it’s clearly a policy intended to take needed financial resources away from hardworking low- and moderate-income working people to lavish tax cuts on wealthy households and profitable corporations.