This report examines the unequal treatment of citizens and non-citizens in the US tax system and how it impacts the lives of immigrant families and plans to combat child poverty which are now under debate in Congress. Immigrants, chiefly the unauthorized, who do not qualify for a Social Security Number are required to pay taxes with an Individual Taxpayer Identification Number (ITIN). ITIN filers have the same income tax due as Social Security filers, but they do not receive the same credits. ITIN filers have never been eligible for the Earned Income Tax Credit (EITC) and some of their children were excluded from the Child Tax Credit (CTC) in the Trump administration’s 2017 tax bill. Substantial expansions of the Earned Income Tax Credit and the Child Tax Credit are critical to the ambitious initiative to halve child poverty that the Biden administration and Congressional Democrats are pursuing through budget reconciliation. Unless these efforts also include ITIN filers, they will leave behind about one of every five children in poverty. Nearly 2 million children – 1.6 million US citizens and 270,000 non-citizens – are living in poverty yet are ineligible for poverty-fighting tax credits because they have at least one undocumented parent. In a positive development, seven states recently have extended state EITC programs to ITIN filers, and others are debating similar measures. The paper proposes a full agenda of actions government and civil society actors could take to provide tax equality to immigrants.
Tax Equality for Immigrants: The Indispensable Ingredient for Remedying Child Poverty in the United States
Journal on Migration and Human Security