Washington, D.C. (October 5, 2021) - A new analysis by the Center for Immigration Studies finds illegal immigrants will receive $8.2 billion annually, or roughly $80 billion over ten years, in cash payments from the new Child Tax Credit, which is part of the stalled budget reconciliation bill.
The new program replaces the Additional Child Tax Credit (ACTC), which paid cash to low-income workers with children. The new Child Tax Credit (CTC), resembles traditional cash welfare because it drops the old ACTC’s work requirement, while significantly increasing payments. Like the old ACTC, any illegal immigrant with a U.S.-born child is eligible for cash payments from the new CTC. Our analysis shows that legal immigrants will receive $17.2 billion from the new CTC. While it is sometimes called a “refundable credit” it is in fact a direct cash grant to those who do not pay any federal income tax.
Dr. Steven Camarota, the Center’s director of research, said, “Giving much larger cash payments may help to alleviate the high rates of poverty in immigrant families, but it also means that any immigrant allowed into the country, legal or illegal, to fill lower-wage jobs potentially has a larger negative impact on taxpayers. Moreover, the decision to give illegal immigrants access to the program is likely to encourage more illegal immigration.”
Among the findings:
- Based on their income and number of dependents, we estimate that 63 percent of all immigrant-headed families (legal and illegal) with children will receive the new cash grant — 57 percent for legal immigrants and 79 percent for illegal immigrants. In comparison, 52 percent of native families with children will receive payments.
- Legal and illegal immigrant parents who qualify for the program are eligible for somewhat larger payments on average than the native-born — about $5,100 for illegal immigrants and $4,800 for legal immigrants. This compares to about $4,600 for the native-born.
- The larger share of immigrants with children accessing the program and the more generous payments they will receive primarily reflect their lower average incomes.
- We estimate that all immigrants (legal and illegal) will receive $25.4 billion from the new program annually, accounting for 27 percent of its total costs, with legal immigrants receiving $17.2 billion, and illegal immigrants receiving $8.2 billion.
- Though a larger percentage of illegal immigrants are poor and qualify for the new program, the total amount paid out to legal immigrants is much larger because there are more low-income legal immigrants in the country.
- Relative to the old ACTC, illegal immigrants with children will be receiving larger payments not only because the program is much more generous for everyone, but also because the old work requirements made it difficult for some illegal immigrants who worked off the books to demonstrate employment. Dropping the work requirement makes it easier for all illegal immigrants with U.S.-born children to access the new program, even those who do not work.
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