Senators Pursue Legislation Preventing Illegal Aliens from Claiming EITC

A group of Senators led by Chuck Grassley of Iowa introduced a bill that would disallow the Earned Income Tax Credit (EITC) for illegal aliens given amnesty under the President’s November 2014 executive actions. “This tax credit is meant to help the working poor get into the workforce,” Grassley said. “It isn’t meant to benefit individuals who aren’t authorized to work in the United States.”

The Internal Revenue Service recently testified that when illegal aliens get Social Security Numbers under Obama’s executive amnesty, they will be able to claim the EITC under tax returns filed for the last three years.

The bill is intended to close a loophole created by a 2000 IRS interpretation that has the effect of allowing those receiving deferred action to qualify for a credit they were previously denied or otherwise ineligible for at the time. It would deny the credit to those receiving deferred action unless they were eligible to claim the credit for the year in question and were authorized to engage in employment in the United States for the entire taxable year. This rule would apply to the year in which they are granted deferred action and for all previous returns.

The non-partisan Joint Committee on Taxation estimated the bill will save $1.7 billion over ten years in payments that otherwise would have gone out. The actual amount of Earned Income Tax Credit payments going to those receiving deferred action could be much greater.

Co-sponsors of the legislation are Mike Enzi, R-Wyo., Mike Crapo, R-Idaho, Jim Inhofe, R-Okla., David Perdue, R-Ga., Tim Scott, R-S.C., Pat Roberts, R-Kan., Johnny Isakson, R-Ga., Jim Risch, R-Idaho, John Boozman, R-Ark., and John Cornyn, R-Tex.

Read more in Sen. Grassley’s press release.