Now some lawmakers advocate cutting off the child tax credit for tax filers who lack of Social Security number. The move is unabashedly aimed at making life harder for undocumented workers, even taxpaying ones, specifically by punishing their children.

Currently, the CTC is one federal tax benefit that people can claim using an Individual Tax Identification Number (ITIN) instead of a social security number. This effectively makes it available to undocumented workers—those who lack formal authorization.

Originally posted by jed001

Children of immigrants targeted by tax warfare in Congress

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Now some lawmakers advocate cutting off the child tax credit for tax filers who lack of Social Security number. The move is unabashedly aimed at making life harder for undocumented workers, even taxpaying ones, specifically by punishing their children.

Currently, the CTC is one federal tax benefit that people can claim using an Individual Tax Identification Number (ITIN) instead of a social security number. This effectively makes it available to undocumented workers—those who lack formal authorization.

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But a 1997 law enacting a $500 per-child tax credit doesn't specifically exclude illegal immigrants from collecting. It was significantly expanded in 2001 to gradually reach $1,000, and rules were eased so that many more people could get it on a refundable basis. It was made more generous in 2009 so that more taxpayers could claim the credit or claim a larger amount. The expanded credit is slated to expire at the end of the year along with other Bush-era tax cuts and return to $500 per child, though it's commonly assumed that it will remain up to $1,000 per child.

"Although the law prohibits aliens residing without authorization in the United States from receiving most federal public benefits, an increasing number of these individuals are filing tax returns claiming this refundable credit," Rep. Sam Johnson, R-Texas, said when the House debated the payroll tax cut measure in December. "Illegal immigrants bilked $4.2 billion from the U.S. taxpayers (in 2010). I think that it's time that we fixed it."

The situation has Democrats in a box. If they fight the GOP effort to cut back payments of the tax credit, they'll be favoring the delivery of refunds to people who not only don't owe income taxes but aren't supposed to be in the country in the first place.

What's more, closing the loophole would raise real money — an estimated $10 billion over 10 years under the approach favored by House Republicans.

The Treasury Department says that in the 2010 filing year more than $4 billion in child credit refunds went to 2.3 million people who filed tax returns but didn't have Social Security numbers proving they were citizens or legal workers. That's a four-fold increase over five years earlier.