WASHINGTON – Senators Chuck Grassley of Iowa and Mike Enzi of Wyoming have filed an amendment to the immigration reform bill that would clarify that undocumented immigrants who are being granted Registered Provisional Immigrant (RPI) status are not eligible to claim the Earned Income Tax Credit for previous years in which they were not legally authorized to work in the United States.
Grassley is the Ranking Member of the Senate Judiciary Committee which has jurisdiction over immigration policy, and a senior member of the Senate Finance Committee which has jurisdiction over tax policy. Enzi is a senior member of the Senate Finance Committee.
The Earned Income Tax Credit is a refundable tax credit targeted at lower income workers. As a refundable tax credit, eligible individuals may receive a cash benefit that exceeds their federal income tax liability. In fact, more than 85 percent of the Earned Income Tax Credit is paid out in the form of a refund exceeding income tax liabilities.
“The Earned Income Tax Credit is designed to help reduce poverty by rewarding and encouraging work. But, the American taxpayer should not subsidize the work of individuals for time they were working illegally in the United States,” Grassley said.
“If you’re in the country illegally, you should not benefit from tax credits designed to help low-income American workers,” said Enzi. “Should the Senate’s immigration plan become law, millions of newly legalized immigrants may be able to go back and claim government assistance they didn’t qualify for. That’s not right and our amendment would help prevent possible abuse by closing this tax loophole.”
Current law generally requires the taxpayer to provide a valid Social Security Number to claim the credit. The Social Security Number requirement also exists for their spouse and children. This requirement is intended to prohibit undocumented immigrants from claiming the credit. However, current law allows a taxpayer who did not have a valid Social Security Number in the initial year they filed a return to later amend and claim the Earned Income Tax Credit once obtaining a valid Social Security Number. Taxpayers generally are able to amend their last three years of returns.
The senators’ concern is that the immigration reform bill would legalize millions of undocumented immigrants who would then be eligible for Social Security numbers. With a Social Security Number, they may be able to retroactively claim the Earned Income Tax Credit for previous years in which they worked in the United States illegally.
A copy of the amendment (SA1379) can be found here.
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