Unintended Consequences? Undocumented, Working Poor Families and the Refundable Child Tax Credit

15 Pages Posted: 15 Nov 2004

See all articles by Francine J. Lipman

Francine J. Lipman

University of Nevada, Las Vegas - William S. Boyd School of Law

Date Written: November 8, 2004

Abstract

Immigrants toil in sweatshops for torturously long days at sub-minimum wages, which may or may not be paid, with little meaningful recourse. Immigrant workers with and without authorization to work in the United States are disproportionately represented among the lowest earners. The average wage among all low-wage immigrant workers was $14,400 in 2001. Moreover, almost half of immigrant workers earned less than twice the minimum wage. These hard working individuals are living in poverty.

The Earned Income Tax Credit (EITC) lifts almost 20 million low-income working individuals out of poverty every year. Unfortunately, the EITC does not apply if a worker, her spouse, or her qualifying child does not have a Social Security number. Consequently, many low-income immigrant working families cannot qualify for the EITC. However, the Child Tax Credit (CTC) under certain circumstances may provide relief.

This Article begins with an explanation of the complex operation of the CTC. The operation of the CTC is examined by focusing the analysis on the different tax consequences for working poor families in which each member has a Social Security number (documented) and those in which at least one member does not have a Social Security number (undocumented). Next, the Article demonstrates how the CTC fails to ensure that undocumented, working poor families do not pay any taxes. Finally, the Article proposes a legislative reform for this onerous problem and encourages Congress to provide relief for all hard-working poor families.

Keywords: Earned income tax credit, child tax credit, working poor, undocumented immigrants

JEL Classification: H22, H24, I31, I38, J15, J18, K34, J61

Suggested Citation

Lipman, Francine J., Unintended Consequences? Undocumented, Working Poor Families and the Refundable Child Tax Credit (November 8, 2004). , . Available at SSRN: https://ssrn.com/abstract=617121 or http://dx.doi.org/10.2139/ssrn.617121

Francine J. Lipman (Contact Author)

University of Nevada, Las Vegas - William S. Boyd School of Law ( email )

4505 South Maryland Parkway
Box 451003
Las Vegas, NV 89154
United States

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