Child Tax Credit for Immigrants Without SSN Might be History

In 2011, Eliberto bought his 4-year old boy, a tricycle.  This year, with the tax refund he will receive he would like to get his older son a toe-pedaled, mini fire engine truck.  His 2-year old boy will settle for a considerable amount of pampers, Gerber puree, and two sets of new outfits. 

Come next year, Eliberto and his wife Sonia once again will file their income taxes using an Individual Taxpayer Identification Number (ITIN) but this time they will receive nothing in return from Uncle Sam if a proposal being entertained in Congress is approved.

Eliberto’s two sons are US-born.  He and his wife are undocumented immigrants and because they cannot have a Social Security Number (SSN), they use an ITIN instead to file their yearly tax return.  

“The money [Child Tax Credit] is the only one we qualify for, and we end up using almost entirely on the children,” stated Eliberto, who did not provide a last name to protect his family.  The Van Nuys resident earns approximately $20,000 a year through full time employment and says that every two weeks approximately $154 disappear from his already small paycheck to pay federal and state taxes.

Eliberto and Sonia are really worried.  Talk of Congress moving forward with a proposal to restrict the Child Tax Credit (CTC) and the Additional Child Tax Credit (ACTC) refund to taxpayers who have a SSN will impact their family budget and that of more than 2 million working families who pay income and payroll taxes.   Hard-working families and low-income families pay over $9 billion in payroll taxes each year according to Accounting Coach.  Eliberto pays $5,544 in taxes every year but receives $2,000 in return as part of the ACTC program.

“If I don’t get that little bit of help for my children, it will affect what I buy for them. With that money I buy food, clothing, diapers, medications, and if I have any left over, a couple of toys.  They are getting older and now they ask me to get them little things to play,” notes Eliberto.

Republicans in the House came up with this anti-immigrant and anti-family scheme as a way to pay for the extension of the payroll tax cut.  By imposing this exorbitant tax hike on the working poor, Latinos, immigrants, and the neighborhoods they live in will also suffer.  This monstrosity of a proposal will have the most devastating impact on children:  It is estimated that up to 5.5 million children, 4 million of whom are U.S.-born citizens, will have this safety net yanked from under their feet overnight.

Eliberto does not understand the political maneuvering pushing this bill forward.  He worries, though, that in addition to his family, “lots of middle-class families and mom-and-pop businesses that serve our community will have serious needs because we will not be shopping there for a while.”  He is right.  Studies have shown that every dollar received by low and moderate-income families has 1.5 to 2 times multiplier effect in terms of its impact on the local economies.  Based on Eliberto’s wish list, most of this year’s ACTC refund will be spent in local stores and shops.

The irony is that while Congress has been consistently unable or unwilling to serve the American people by adjusting our immigration laws, they are willing to hurt the general public by making a point about immigration through this proposal.

Perhaps we will save a lot of money by denying eligibility to ITIN taxpayers for ACTC, you may be saying.  The savings barely compute.  The bill is estimated to save $9.6 billion in over 10 years—a time period during which these same taxpayers will contribute $90 billion to the federal coffers.

I get that Congress must find ways to pay for the payroll benefits it will likely extend.  I get that something has got to give.  But to take this life-saving financial assistance away from the hands of taxpayers who are barely getting by is reprehensible.  Over 60 percent of families using the refundable CTC earn less than $25,000 per year.  According to a 2009 report, the ACTC credits protected approximately 1.3 million children from falling into poverty.

These are the numbers.  The real impact can only be felt when you meet families like Eliberto’s who do what they must to protect and feed their children but also do their best to comply with their civic duty which includes paying taxes and filing returns.  “I have thought about not filing my returns,” says Eliberto, “but I know that it is my responsibility and I want to help this country get stronger so that my family has a future here.” 

Eliberto’s family is Latino.  The bill in question will hit the Latino community hardest because 80 percent of those impacted are Latino families.  Of the estimated 15 million children living in poverty in the U.S., forty percent are Latino children.  Eliberto asks me why Congress is attacking his family.  His two U.S.-born children can be heard playing in the background and I have no real answer for him. 

Thus far Congress has failed to address why it is necessary to target vulnerable population such as these 4 million US-born children and their undocumented parents.  Saving estimates pale in comparison to the robust contribution low-income families make to our economy in payroll taxes each and every year. 

In this politicized environment where everything, or almost everything, is the immigrant’s fault, we must caution members of Congress to thread carefully and not overreach.  As members of the general public, we must ask our national leadership why this Herod-like persecution of children is necessary.   Many of us may be against granting some benefits to undocumented workers, even if they pay their fair share of income and payroll taxes, but few of us will have the heart to keep Eliberto’s US-born sons from getting a mini fire engine truck, the Gerber puree, and a nice supply of pampers.

For more information, please visit our website at www.chirla.org or the National Immigration Law Center or the National Council of La Raza.

- Jorge-Mario Cabrera is the director of communications at the Coalition for Humane Immigrant Rights of Los Angeles (CHIRLA).