Latest news with #ITINs
Yahoo
23-05-2025
- Business
- Yahoo
House GOP zeroes in on immigrants to help fund tax cuts
Republicans are leaning on immigrants, undocumented or not, to help make the math work for their sprawling tax package. Even as they push to cut taxes on millions of Americans, lawmakers want to simultaneously bar immigrants from claiming a panoply of tax benefits, from the popular Child Tax Credit to Obamacare health-insurance subsidies to an obscure break on student-loan debt that's forgiven when someone becomes disabled. Republicans are zeroing in on so-called refundable credits, where people can get a check from the government when the benefit exceeds their tax bills. They say those payments should not be going to people who are not citizens. The little-noticed provisions are likely to generate more than $80 billion for the Republicans' $4 trillion tax-cut plan while dovetailing with the president's hardline approach to immigration. 'Why don't we just find people in Ethiopia and Iran and pay them benefits too?' said Rep. Kevin Hern (R-Okla.), a tax writer. 'They're not citizens of the United States and we're going to make sure taxpayer dollars are protected." It's a move that has outraged Democrats and immigration groups, who say it would hurt vulnerable populations. They also note it would hit some people who are here legally, including some children who are U.S. citizens. Two million of them would lose access to the Child Tax Credit through provisions in the bill requiring their parents to have Social Security numbers, forecasters say. And they warn it could actually depress tax collections. Undocumented immigrants are required to pay income taxes like everyone else, and taking away benefits could dissuade some from filing altogether — especially in the wake of a controversial agreement by the IRS to help the Department of Homeland Security identify people in the U.S. illegally. 'It's disgusting,' said Rep. Linda Sanchez (D-Calif.), another tax writer. 'It's a malicious thing that hurts not just individuals, but communities at large.' "They're just trying to throw red meat to the MAGA base." The provisions haven't gotten much attention, overshadowed by higher-profile fights over state and local tax deductions and other flashpoints in Republicans' megabill, approved Thursday by the House. But it amounts to another front in Republicans' fight against illegal immigration, and the most comprehensive effort in years by lawmakers to cut off immigrants from tax benefits. Immigrants are ineligible for Social Security numbers, so the IRS gives them so-called Individual Taxpayer Identification Numbers allowing them to file. In 2023, the agency issued almost 900,000 ITINs. Not all went to undocumented immigrants, and the IRS doesn't track how much they pay in tax, but budget experts generally agree they contribute more in taxes than they receive in benefits, though estimates vary. The bill aims to deny undocumented immigrants various tax benefits by barring claims using ITINs. Currently, a child is required to have a Social Security number to qualify for the $2,000 Child Tax Credit, which means kids who are citizens can benefit even if their parents are not here legally. The legislation would require the person filing the return to have a Social Security number too. If married, both parents would have to have them, and the couple would be required to file their taxes jointly. That's designed to prevent people from evading the rules by doing their taxes separately, but it could be awkward for some, like a couple getting a divorce. People would also be required to have Social Security numbers to receive two popular college education breaks: the $2,500 American Opportunity Tax Credit and the $2,000 Lifetime Learning Credit. Immigrants would also lose access to a provision in the tax code that waives the tax bill that would otherwise be triggered if a person becomes disabled or dies and their outstanding student-loan debt is canceled. Normally, the IRS sees forgiven debt as equivalent to income and subjects it to tax. Undocumented immigrants would likewise be barred from provisions sought by President Donald Trump creating new breaks for tips and overtime pay. Republicans would also restrict Obamacare subsidies used to buy health insurance, though there, the effect would be felt by other categories of immigrants. Undocumented immigrants have always been banned from taking that credit. The legislation would prevent claims by other immigrants who have been legally admitted to the U.S., including those granted asylum, temporary protected status and others. And Republicans would impose a new 3.5 percent tax on remittances to people abroad. U.S. citizens would get a special tax credit to compensate them for having to pay the levy. Many Republicans call the tax benefits wasteful and some say they create an incentive for people to illegally migrate to the U.S. 'We should be able to make it very clear that illegal immigrants are not going to be given certain benefits,' said Rep. Blake Moore (R-Utah). At the same time, he said he's concerned about hurting other immigrants here legally, such as refugees. 'That's where I find there to be much more nuance and need for conversation,' he said. The effort is drawing protests from Democrats, immigrant advocacy groups and the Mexican government. Sanchez is particularly incensed by the child credit restrictions. 'You're punishing the U.S. citizen's children for their parent's immigration status,' she said, adding that Hispanic children are more likely to live in poverty. Advocates also worry about an uptick in uninsured health care as people lose access to Affordable Care Act subsidies. Meantime, Mexico's ambassador to the U.S. fired off a letter to tax writers criticizing the remittance tax. It amounts to 'double taxation, since migrants already pay taxes in the country where they work,' wrote Esteban Moctezuma Barragan. 'Applying this tax would disproportionately affect the most vulnerable workers, many of whom perform essential functions critical to the proper functioning of the U.S. economy.'
Politico
23-05-2025
- Business
- Politico
House GOP zeroes in on immigrants to help fund tax cuts
Republicans are leaning on immigrants, undocumented or not, to help make the math work for their sprawling tax package. Even as they push to cut taxes on millions of Americans, lawmakers want to simultaneously bar immigrants from claiming a panoply of tax benefits, from the popular Child Tax Credit to Obamacare health-insurance subsidies to an obscure break on student-loan debt that's forgiven when someone becomes disabled. Republicans are zeroing in on so-called refundable credits, where people can get a check from the government when the benefit exceeds their tax bills. They say those payments should not be going to people who are not citizens. The little-noticed provisions are likely to generate more than $80 billion for the Republicans' $4 trillion tax-cut plan while dovetailing with the president's hardline approach to immigration. 'Why don't we just find people in Ethiopia and Iran and pay them benefits too?' said Rep. Kevin Hern (R-Okla.), a tax writer. 'They're not citizens of the United States and we're going to make sure taxpayer dollars are protected.' It's a move that has outraged Democrats and immigration groups, who say it would hurt vulnerable populations. They also note it would hit some people who are here legally, including some children who are U.S. citizens. Two million of them would lose access to the Child Tax Credit through provisions in the bill requiring their parents to have Social Security numbers, forecasters say. And they warn it could actually depress tax collections. Undocumented immigrants are required to pay income taxes like everyone else, and taking away benefits could dissuade some from filing altogether — especially in the wake of a controversial agreement by the IRS to help the Department of Homeland Security identify people in the U.S. illegally. 'It's disgusting,' said Rep. Linda Sanchez (D-Calif.), another tax writer. 'It's a malicious thing that hurts not just individuals, but communities at large.' 'They're just trying to throw red meat to the MAGA base.' The provisions haven't gotten much attention, overshadowed by higher-profile fights over state and local tax deductions and other flashpoints in Republicans' megabill, approved Thursday by the House. But it amounts to another front in Republicans' fight against illegal immigration, and the most comprehensive effort in years by lawmakers to cut off immigrants from tax benefits. Immigrants are ineligible for Social Security numbers, so the IRS gives them so-called Individual Taxpayer Identification Numbers allowing them to file. In 2023, the agency issued almost 900,000 ITINs. Not all went to undocumented immigrants, and the IRS doesn't track how much they pay in tax, but budget experts generally agree they contribute more in taxes than they receive in benefits, though estimates vary. The bill aims to deny undocumented immigrants various tax benefits by barring claims using ITINs. Currently, a child is required to have a Social Security number to qualify for the $2,000 Child Tax Credit, which means kids who are citizens can benefit even if their parents are not here legally. The legislation would require the person filing the return to have a Social Security number too. If married, both parents would have to have them, and the couple would be required to file their taxes jointly. That's designed to prevent people from evading the rules by doing their taxes separately, but it could be awkward for some, like a couple getting a divorce. People would also be required to have Social Security numbers to receive two popular college education breaks: the $2,500 American Opportunity Tax Credit and the $2,000 Lifetime Learning Credit. Immigrants would also lose access to a provision in the tax code that waives the tax bill that would otherwise be triggered if a person becomes disabled or dies and their outstanding student-loan debt is canceled. Normally, the IRS sees forgiven debt as equivalent to income and subjects it to tax. Undocumented immigrants would likewise be barred from provisions sought by President Donald Trump creating new breaks for tips and overtime pay. Republicans would also restrict Obamacare subsidies used to buy health insurance, though there, the effect would be felt by other categories of immigrants. Undocumented immigrants have always been banned from taking that credit. The legislation would prevent claims by other immigrants who have been legally admitted to the U.S., including those granted asylum, temporary protected status and others. And Republicans would impose a new 3.5 percent tax on remittances to people abroad. U.S. citizens would get a special tax credit to compensate them for having to pay the levy. Many Republicans call the tax benefits wasteful and some say they create an incentive for people to illegally migrate to the U.S. 'We should be able to make it very clear that illegal immigrants are not going to be given certain benefits,' said Rep. Blake Moore (R-Utah). At the same time, he said he's concerned about hurting other immigrants here legally, such as refugees. 'That's where I find there to be much more nuance and need for conversation,' he said. The effort is drawing protests from Democrats, immigrant advocacy groups and the Mexican government. Sanchez is particularly incensed by the child credit restrictions. 'You're punishing the U.S. citizen's children for their parent's immigration status,' she said, adding that Hispanic children are more likely to live in poverty. Advocates also worry about an uptick in uninsured health care as people lose access to Affordable Care Act subsidies. Meantime, Mexico's ambassador to the U.S. fired off a letter to tax writers criticizing the remittance tax. It amounts to 'double taxation, since migrants already pay taxes in the country where they work,' wrote Esteban Moctezuma Barragan. 'Applying this tax would disproportionately affect the most vulnerable workers, many of whom perform essential functions critical to the proper functioning of the U.S. economy.'
Yahoo
14-05-2025
- Business
- Yahoo
Millions of immigrant families would be shut out under new child tax credit proposal
Republicans would raise the child tax credit to $2,500 per eligible child in the tax-writing committee's latest proposal. But the bill would also exclude millions of families from accessing the credit, including the country's poorest households and immigrant or mixed-status families. One provision of the bill requires a child's parent or parents to have a Social Security Number, shutting out undocumented immigrants or those without work authorization, even when the child themselves has a Social Security Number. In mixed-status households, where one parent has a Social Security Number and the other doesn't, the child is still ineligible. Some estimates show this change could impact 4.5 million children alone. Coupled with proposals from other committees that restrict access to Medicaid or the Supplemental Nutrition Assistance Program (SNAP), immigrant and mixed-status families face drastically rising costs, according to Ashley Burnside, a senior policy analyst at the Center for Law and Social Policy. 'We'll see more people having to make impossible decisions,' Burnside said. 'As more families are arbitrarily restricted from accessing these critical health benefits, it's going to result in a lot of hardship for people. That is going to make all of us worse off as communities.' Many filers without Social Security Numbers use Individual Taxpayer Identification Numbers (ITINs) to pay taxes, but would no longer be able to access tax credits under this proposal — part of an administration crackdown on immigrants using public social services. 'Immigrant families, undocumented families, use ITINs to pay around $100 billion every year in taxes. The fact that they're not able to benefit from any of these benefits intended for families undermines the idea that this is a pro-family, pro-worker provision,' said Kat Menefee, senior counsel for income security and child care at the National Women's Law Center Action Fund. Through this proposal's extension of changes from the last major tax overhaul in 2017, another 17 million of the country's lowest-income households will still not have access to the full credit because they do not earn enough to pay federal income taxes — nor will an additional 1 million children who do not have Social Security Numbers. Before 2017, all children were eligible as long as their parents filed their tax returns and met the other credit requirements. 'This bill doubles down on that assault on those seeking the American Dream by stealing tax benefits and services to working people who are paying taxes,' Rep. Linda Sánchez, a California Democrat, said during a committee markup of the 2025 tax bill. This version also eliminates the Direct File program, which allows households to file taxes with the IRS for free, and adds restrictions to applying for and receiving the Earned Income Tax Credit, potentially resulting in more families losing money meant to supplement lower-earning households. The current House tax proposal will likely change significantly, with several other sections having garnered opposition from fellow Republicans in both chambers. But the principle of removing many immigrant and mixed-status households is likely to stay, as Republicans look to find any money to cut in alignment with President Donald Trump's desire to slash federal spending. More than 46 million taxpayers claim the child tax credit each year. During the pandemic, congressional Democrats and then-President Joe Biden temporarily increased the child tax credit to up to $3,600, expanded eligibility to more of the lowest-earning families and delivered the credit in monthly checks to recipients rather than in one lump sum. These changes lifted millions of households out of poverty. But the credit reverted back to $2,000 in 2022 — and child poverty rose soon after. Last year, GOP senators and former Sen. Joe Manchin, a West Virginia Independent who used to caucus with Democrats, rejected a tax package that would have moderately increased the credit, part of legislation that had already passed the House with bipartisan support. The fact that Republicans had signed onto a House bill that expanded access to more lower-earning families — with direct involvement from Rep. Jason Smith, the Missouri Republican who chairs the Ways and Means Committee — shows that those same improvements are financially possible to add again, according to Bob Greenstein, a visiting fellow at the Brookings Institution. But last August's bill was proposed under former President Biden, and Republicans signed on to some Democratic policies. Now that the GOP controls the House, Senate and White House, Republicans 'threw that over the side,' Greenstein added. Combined with proposed deep cuts to Medicaid and SNAP, families with modest or low incomes will be adversely affected, he said. 'It's curious — the reconciliation bill as a whole really slams the working family, working paycheck-to-paycheck,' Greenstein said. 'Those families (were also) the key part of the Trump base in 2024.' Senators have a wider array of ideas to increase or improve the child tax credit, including a proposal to offset a parent's payroll taxes from Sen. Josh Hawley, a Missouri Republican, though he has not yet filed official legislation, nor does he sit on the Finance Committee. Sen. Mike Crapo, the Idaho Republican who chairs the committee, has signaled interest in increasing the credit in some capacity, but he has historically been opposed to lowering the floor for qualifying family incomes, Greenstein noted. Meanwhile, Democrats, led by Colorado Sen. Michael Bennet, have laid out an ambitious plan for an expanded, tiered credit system. But the bill is all but likely to gather dust in a harsh cost-trimming environment. Lawmakers must decide on some change during the reconciliation process — otherwise, the credit reverts back to a $1,000 baseline in the fall. The post Millions of immigrant families would be shut out under new child tax credit proposal appeared first on The 19th. News that represents you, in your inbox every weekday. Subscribe to our free, daily newsletter.
USA Today
09-04-2025
- Business
- USA Today
IRS agrees to share tax information to help with Trump deportation plans: court records
IRS agrees to share tax information to help with Trump deportation plans: court records Millions of people pay taxes with ITINs, which are used by people who don't have social security numbers and aren't legally present in the U.S. Show Caption Hide Caption IRS agrees to share tax information to help Trump's deportation plans The IRS will share taxpayer information, including addresses, with Homeland Security to assist in locating undocumented immigrants. The IRS will share taxpayer information, including addresses, with Homeland Security to assist in locating undocumented immigrants. This agreement aims to support the enforcement of immigration laws and identify individuals for criminal investigations. Immigrant advocacy groups express concern that this policy could have a chilling effect on immigrants and deter them from paying taxes. The IRS has agreed to share tax information with federal immigration agents to help them find immigrants in the U.S. illegally, according to court filings. Amid the news about the immigration policy sharing tax information, Melanie Krause, the acting IRS commissioner, planned to resign from her post, according to two administration officials. The Washington Post first reported on her expected resignation due to the new agreement. A spokesperson for the Treasury Department, which oversees the Internal Revenue Service, said Krause is headed on to a new endeavor but they did not disclose details. Krause could not be reached for comment. The sharing agreement creates a framework to use tax information to fulfill President Donald Trump's promise to crack down on millions of undocumented people in the U.S. Millions of immigrants who aren't lawfully present in the U.S., and don't have social security numbers, use Individual Taxpayer Identification Numbers (ITINs) to pay their taxes each year. IRS has their names and addresses. In early February, Homeland Security Secretary Kristi Noem requested help from the Treasury Department in immigration enforcement. In a court filing, Justice Department lawyers disclosed a copy of the redacted agreement between the IRS and the Department of Homeland Security signed Monday by Noem and Treasury Secretary Scott Bessent. Under the terms, Immigration and Customs Enforcement can obtain addresses and other details about people they are targeting for crimes. 'DHS can legally request (tax) return information relating to individuals under criminal investigation, and the IRS must provide it,' Justice Department lawyers wrote in a filing opposing a motion to block the policy. The changes appear focused on criminal enforcement, however, they are likely to have a chilling effect on working immigrants, Aaron Reichlin-Melnick, a senior fellow at the nonprofit American Immigration Council, said in a post on the social media site X. Thomas Kennedy of the Florida Immigrant Coalition, a pro-immigrant group, said on X that the policy would deter immigrants from paying taxes, hurting all Americans. The nonprofit American Immigration Council estimated that households of undocumented immigrants paid nearly $90 billion in taxes in 2023, including close to $56 billion in federal taxes and $34 billion in state and local taxes. A federal report found there were over 5.8 million people with active ITINs as of Dec. 31, 2022. In early March, two Chicago area not-for-profit organizations representing immigrant communities and workers sued the Treasury Department to prevent disclosing sensitive information of taxpayers who file ITINs to the IRS. The groups worried that this would 'greatly facilitate DHS and ICE in identifying and locating millions of individuals who are potentially subject to removal,' the lawsuit, filed in D.C. district court, said. 'Access to this sensitive data by DHS and ICE would thereby expose millions of taxpayers to the administration's aggressive immigration enforcement tactics.' In a declaration on Monday, Kathleen Evey Walters, chief privacy officer for IRS, said neither DHS nor ICE have so far requested information of taxpayers under the new agreement. In a letter to Treasury Department officials, the Congressional Hispanic Caucus on Tuesday urged the department to uphold its "clear legal mandate" to protect taxpayer information and reject the "illegal use" of ITIN for immigration enforcement. "Such an agreement would not only violate long-standing federal privacy protections but also undermine the integrity of our tax system, endanger vulnerable communities, and harm the broader U.S. economy," the 23 congressional representatives, all Democrats, wrote in the letter. The IRS, they said, has no legal authority to use its data for immigration enforcement. Any effort to do so would violate federal law, they said. The annual April 15 Tax Day is a week away. Contributing: Nick Penzenstadler, Zac Anderson
Express Tribune
24-03-2025
- Business
- Express Tribune
IRS set to share taxpayer data with ICE for deportation purposes
Listen to article The US Internal Revenue Service (IRS) is close to finalising a controversial agreement with the Department of Homeland Security (DHS) that would allow Immigration and Customs Enforcement (ICE) to use taxpayer data to locate undocumented migrants, a source familiar with the matter has revealed. Under the proposed deal, ICE would submit the names and addresses of individuals suspected of being in the US illegally. The IRS would then cross-reference these details with its tax records to confirm their location. The agreement, which is still under negotiation, would represent a significant shift in the IRS's longstanding policy of safeguarding taxpayer confidentiality. Historically, the IRS has kept taxpayer information closely guarded, with strict laws prohibiting the release of such data. These laws are designed to protect the privacy of individuals and prevent misuse of tax information. The agency has also encouraged undocumented migrants to file taxes, a process that requires them to disclose personal details such as their addresses and income. However, this proposed change has raised concerns among privacy experts and immigrant rights groups. Critics argue that the agreement would violate confidentiality rules and could lead to the misuse of sensitive taxpayer information for immigration enforcement. Earlier drafts of the proposal were even more expansive, requesting broad access to data on thousands of individuals who filed taxes using individual taxpayer identification numbers (ITINs), a form commonly used by undocumented migrants. In response to the deal, two immigrant rights groups filed a lawsuit against the Treasury Department and the IRS, arguing that federal law prohibits the IRS from sharing taxpayer data with ICE or DHS. They claim that the tax code only allows for the disclosure of such information in certain circumstances, none of which apply to immigration authorities. Under the current draft, the IRS would not directly provide ICE with the names and addresses of migrants. Instead, DHS would request this information, and the IRS would only confirm whether the details are accurate. Requests would need to be submitted by DHS Secretary Kristi Noem or acting ICE Director Todd Lyons, and would include the taxpayer's name, address, and the date of their removal order. The finalisation of this agreement is expected to align with President Donald Trump's continued push for stricter immigration enforcement, a key issue in his administration. The proposed deal, which could be in place as early as next month, has sparked fears of further erosion of privacy rights in the US, particularly among vulnerable undocumented migrants. This move would mark a major shift in how the US government handles tax and immigration data. If approved, it would be the first time immigration authorities have relied on the IRS's confidential tax system for enforcement purposes on such a scale. The ongoing negotiations are expected to face significant legal challenges, as privacy advocates argue that such a breach of confidentiality could have far-reaching consequences for the trust placed in government institutions. Earlier, the United States announced it would terminate the legal status of hundreds of thousands of immigrants, giving them until April 24 to leave the country. The move affects around 532,000 Cubans, Haitians, Nicaraguans, and Venezuelans who entered under a program launched by President Joe Biden in October 2022 and expanded in January 2023. The immigrants will lose their legal protection 30 days after the Department of Homeland Security publishes the order in the Federal Register, which is scheduled for Tuesday. Those affected must depart the US unless they secure another immigration status.
