Denying Immigrants the Earned Income Tax Credit

From the National Immigration Law Center:

The Sessions amendment to the Comprehensive Immigration Reform Act of 2006 (S. 2611) would deny one of the county’s most effective anti-poverty programs – the Earned Income Tax Credit (EITC) – to a wide range of immigrants. The amendment language was filed yesterday and is much more restrictive than anticipated. It would deny EITC to the three major groups of immigrants who would be able to legalize their status under the Senate immigration bill: undocumented persons living and working in the US; persons newly arriving under the new “guest worker” program; and farm workers eligible for legal status under “AgJOBS” provisions. All these immigrants would be required to pay taxes, but would be treated as inferior by the tax system’s rules. They would not be able to claim EITC, which is intended to help offset tax burdens for low-income workers. These immigrants would remain ineligible for EITC even after they become lawful permanent residents. By imposing immigration status restrictions on EITC eligibility, the amendment would for the first time require the Internal Revenue Service (IRS) to verify the citizenship or immigration status of all EITC applicants. Current procedures require applicants to provide a valid Social Security Number and streamline the EITC application with the tax filing. Over twenty million families currently claim the EITC. The program’s high participation rate depends on its simplicity. If all EITC applicants were required to verify their citizenship status, or their particular immigrant status, EITC participation would plummet, and many eligible working families – citizen and immigrant alike – would drop off the program. That is the unspoken part of the Sessions amendment’s appeal to those who oppose the EITC as a whole. Senator Sessions has argued that his amendment is necessary in order to contain costs associated with legalization. However, CBO and Joint Tax Committee estimates show that, as a group, the new population of legal immigrants would pay more than twice as much in income and payroll taxes as they would receive in refundable tax credits such as EITC. The net effect of the increased costs and increased revenues would be a gain of more than $30 billion between 2007 and 2016. It is fundamentally unfair, and inconsistent with the intent of the Senate bill, to deny newly legalized immigrants who will contribute so much in taxes the same tax benefits that other families in this country receive.

KJ