Programs are cash payments, not tax refunds
From the Center for Immigration Studies
Estimating Illegal Immigrant Receipt of Cash Payments from the EITC and ACTC
Steven A. Camarota is the director of research and Karen Zeigler is a demographer at the Center.
The nation’s two largest cash assistance programs for low-income workers are the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC). Despite their names, both programs are cash payments, not tax refunds. Millions of illegal immigrants have Social Security numbers (SSNs), potentially allowing them to receive cash payments from the EITC and ACTC. Illegals without SSNs who have U.S.-born children are also allowed to receive the ACTC by using an Individual Taxpayer Identification Number (ITIN). Based on their income and number of U.S.-born children, we estimate that illegal immigrants may receive between $3.8 and $4.5 billion from the two programs. This is in addition to the $4.4 billion we have previously estimated illegals likely received in stimulus checks this year.
- About two million illegal immigrants have been issued Social Security numbers, including those with Deferred Action for Childhood Arrivals (DACA), Temporary Protected Status (TPS), and applicants for adjustment of status, suspension of deportation, and asylum, as well as parolees and those granted withholding of removal.
- All of the above individuals are in the country illegally and could be required to leave. Yet, under the current system, they are still given work authorization and Social Security numbers, allowing them to receive the EITC and ACTC.
- In addition to the nearly two million illegal immigrants issued Social Security numbers, the Social Security Administration has previously estimated that 700,000 illegal immigrants use stolen identities and SSNs, which would allow them to access the two programs.
- Finally, under current law illegal immigrants without SSNs are still allowed to receive the ACTC, but not the EITC, by using an Individual Taxpayer Identification Number if they have U.S.-born children.
- Reflecting their much lower levels of education on average than the native-born, we estimate that about 19 percent of all illegal immigrants are poor enough to receive the EITC and 15 percent are poor enough to receive the ACTC. This compares to about 6 and 4 percent respectively for the native-born.
- Based on their income and number of dependents, illegal immigrants with SSNs likely receive $2.9 billion in cash payments — $2 billion from the EITC and nearly $890 million from the ACTC. In addition, illegal immigrants using ITINs may receive between $870 million and $1.6 billion from the ACTC. In total, illegal immigrants will receive between $3.8 billion and $4.5 billion in cash from these two programs.
- With the exception of those using stolen identities, illegal immigrants issued SSNs or ITINs are not breaking the law by receiving cash payments from these programs. The decision to issue SSNs and ITINs to illegal immigrants cannot but help to undermine immigration law and encourage more illegal immigration.
- We report the ACTC figures as a range because the IRS has not published the number of people using ITINs to file tax returns in recent years, so we have only a rough idea of how many illegal immigrants are using them to receive the ACTC.
- Both the 2015 PATH Act and the 2017 Tax Cuts and Jobs Act included provisions making it somewhat more difficult for illegal immigrants to receive ACTC payments. These provisions likely have reduced what illegal immigrants are receiving from that program below the $4.3 billion the Inspector General for Tax Administration found they received from it in 2010.
Read the full report here.