Supporting Children through the Child Tax Credit

A recent report from the Center on Budget and Policy Priorities states that the child tax refund, which provides up to $1,000 per child to low-income and middle-class families, currently prevents more than 2.6 million people from falling into poverty, including 1.4 million children. Tax credit eligibility is attached to the child and therefore, families who are not eligible for other safety net programs are able to benefit from the child tax credit, for instance American children with undocumented parents. 

Without a Social Security number, undocumented workers are able to work to file and pay federal taxes through an Individual Taxpayer Identification Number (ITIN), which currently allows immigrant parents to obtain the refund on behalf of their children. A report by the Treasury Department’s inspector general reveals that 2 million taxpayers claimed a refund using an ITIN, and the average household income for these families was about $21,240, which is less than half of the median household income in the United States. In 2010, $4.2 billion in refundable credits were issued to the ITIN filers; however, those same filers contributed more than $7 billion in federal taxes toward Medicare and Social Security programs from which they will never receive benefits. While provisions that support mixed documentation families may be politically controversial, the U.S. Treasury and American taxpayers benefit from permitting undocumented tax filers even when tax credits, like the child tax credit, are taken into account.

State policymakers should ensure that families have the supports and services they need to thrive, and there are potential opportunities in policies that enact or expand state child tax credits. The child tax credit was designed to lift U.S. citizen children out of poverty, and the extra financial assistance goes towards books, daycare, food, and other essential costs for children – helping to decrease disadvantage.

To learn more about the results-based, state policy strategies that can provide needed supports to children and families - visit Policy for Results.