Friend,

Following House passage of the Tax Relief for American Families and Workers Act, I’ve heard from some constituents in Virginia’s First District who are concerned about the Child Tax Credit (CTC) section of the bill and protections to safeguard against abuse. Rest assured, this conservative bill maintains all of the safeguards made to the CTC in its 25-year lifespan, including a social security number (SSN) requirement established by Republicans in the 2017 GOP tax law. Today, the Child Tax Credit remains among the most secure credits in the federal tax code that protects against improper claims and includes safeguards against payments to non-citizens. 

Additionally, I wanted to share the following information released by the House Ways and Means Committee: 

The Tax Relief for American Families and Workers Act PRESERVES existing SSN protections, DOES NOT change any current safeguards in the child tax credit, and DOES NOT open the door to new child tax credit claims by illegal immigrants.

• When Republicans expanded the child tax credit in the 2017 GOP tax reform, they also added an SSN requirement for a child to be eligible for the credit.
• Prior to GOP tax reform, the improper payment rate for the child tax credit was 25 percent – the new SSN safeguard helped cut the improper payment rate in half.
• And with the GOP tax reform safeguard in place, recent border crossings will not be eligible for the child tax credit.
• The SSN requirement for a child to be eligible for the credit is set to expire at the end of 2025 and will require congressional action to extend or make it permanent.

No other tax credit or deduction can match the child tax credit’s protections from improper claims combined with safeguards on payment of benefits to non-citizens.

• Adding SSN safeguards to other provisions across the individual side of the tax code continues to be a long-term effort, achieving a few hard-fought gains over time.
• Other than GOP tax reform in 2017, the most recent change to add SSN safeguards was in the PATH Act of 2015.
• Many provisions in the tax code currently have no SSN requirements:
  • Child and Dependent Care Tax Credit.
  • Saver’s Credit.
  •  Education credits like the American Opportunity and Lifetime Learning Credits.
  • Green handouts like the Electric Vehicle Tax Credit, Energy Efficient Home Improvement Credit, and the Residential Clean Energy Credit.
  •  Deductions like the standard deduction and the teacher expense deduction.
• Since the inception of the child tax credit, taxpayers with an Individual Tax Identification Number (ITIN) can claim the credit with respect to eligible children – a situation currently covering less than 0.75 percent of all tax filers.

House Ways and Means Committee Chairman Jason Smith (MO-08) released the following statement alongside a fact sheet explaining the important safeguards maintained in the bill:

“The Child Tax Credit reforms in this bill are pro-family policies that maintain the child tax credit structure of the Trump-era GOP tax reform. It halts any push for monthly checks and provides no special loopholes for illegal immigrants. In fact, the plan still requires a Social Security number for children which was added in the 2017 GOP tax reform.

“Maintaining the credit structure, and rejecting calls for monthly checks and no work requirements, incentivizes work and benefits millions of hard-working American families. In fact, studies by tax experts, including the Joint Committee on Taxation, have found that this bill would have a positive effect on work incentives. The Child Tax Credit provisions in this bill help families crushed by inflation, remove the penalty for families with multiple children, and maintains work requirements. I am committed to delivering relief for those families who have spent years struggling under the weight of rising inflation.” 

Sincerely,

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