NCPA - National Center for Policy Analysis

Millions of Immigrants could Receive Earned Income Tax Credits for Illegal Work

March 5, 2015

One unexpected effect of Obama's executive action on immigration will be tax cuts millions of people living in the United States illegally.  Senator Chuck Grassley recently asked the Internal Revenue Service if immigrants who were affected by the president\'s unilateral action would be eligible for the earned income tax credit. The IRS reported that not only are they eligible, but they could as claim the Earned Income Tax Credit on earnings dating back to 2011.

The Earned Income Tax Credit was designed to target low to moderate income Americans and incentivize them to return to work — even if that work is illegal.  The IRS does not yet have a figure for how much this retroactive tax credit will cost, but Senator Grassley is ready to propose legislation that could deny the credit to the affected workers.

Possible outcomes of Obama's executive action could include:

  • Filers with a Social Security number could claim tax credits for up to three previous tax years.
  • Granting nearly 5 million illegal immigrants Social Security numbers and work permits. However, it's unknown how many of those remaining in the United States would be eligible for the Earned Income Tax Credit.

The Treasury Department has not provided a figure for how much the tax credit will cost American taxpayers.

Source: Melissa Quinn, "IRS Says Illegal Immigrants Eligible for Tax Credits," Daily Signal, March 2, 2015.


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