Senate Republican: Unauthorized claims for child credit could hit $7 billion

A top Senate Republican said Tuesday that the federal government could hand out more than $7 billion this year in a refundable tax credit to workers not authorized to be in the United States.

The Treasury Department’s inspector general for tax administration has already said that unauthorized workers claimed $4.2 billion in Additional Child Tax Credits (ACTC) in 2010.

Extrapolating from those numbers, the office of Sen. Jeff Sessions (Ala.), the ranking Republican on the Budget Committee, projected those ACTC claims would have hit $5.6 billion in 2011 and $7.4 billion in 2012. That would be up from $924 million in 2005, according to figures from the inspector general. 

Sessions and other GOP lawmakers, like Sen. David Vitter (La.), have pushed to stop unauthorized workers from receiving the ACTC. Tax breaks like the ACTC are called refundable tax credits because taxpayers can receive a cash refund even if they don’t have any tax liability. 

Under Clinton-era legislation, taxpayers without Social Security numbers could not claim refundable credits like the Earned Income Tax Credit.

But the ACTC was enacted after that measure, and the IRS has said that it cannot take work status into account when dealing with ACTC claims.