Contents

• Introduction
• Overview of Immigration Statuses
• Noncitizens and Federal Tax Liability
• Taxpayer ID and Immigration Status
• Social Security Numbers (SSNs) and Noncitizens
• Employment Authorization for Noncitizens
• Individual Taxpayer Identification Numbers (ITINs)
• Immigration Status and Tax IDs
• Interagency Information Sharing: Taxpayer IDs
• Child Tax Credit
• Child Tax Credit Eligibility Criteria
• Taxpayer ID Requirements for the Child Tax Credit
• Other Child Tax Credit Changes in the TCJA
• Impact of TCJA Changes to the Child Tax Credit
• Selected Recent Congressional Activity

Summary

The child tax credit was created in 1997 (P.L. 105-34) to reduce the income tax liabilities of working families. The Tax Cuts and Jobs Act (TCJA; P.L. 115-97) made temporary changes to the eligibility requirements and the size of the child tax credit starting in tax year 2018. These changes are scheduled to expire at the end of 2025.

Prior to 2018, tax filers claiming the child tax credit could provide either individual taxpayer identification numbers (ITINs) or Social Security numbers (SSNs) for themselves and their children. Changes made in the TCJA currently require that children for whom the credit is claimed have a work-authorized SSN. Filers will be able to claim the credit by providing a work-authorized SSN or an ITIN for the child starting in tax year 2026, absent congressional action.

The relationship between taxpayer identification and immigration status is complex; some, but not all, noncitizens are eligible for work authorization and thus eligible for a work-authorized SSN. Individuals who are ineligible for a work-authorized SSN may use an ITIN for tax purposes; however, the use of an ITIN does not mean that an individual is in the United States without authorization. There is limited publicly available data on the characteristics of ITIN filers.

The TCJA enacted the change to the identification requirement described above alongside other child tax credit-related changes, including (1) increasing the maximum credit per qualifying child; (2) raising the income level at which the credit begins phasing out; (3) making the credit only partially refundable; and (4) creating a smaller, nonrefundable credit for non-child dependents. These changes are also scheduled to expire after the 2025 tax year.

Lawmakers have a range of options if they choose not to let the work-authorized SSN requirement expire as scheduled. In recent Congresses, lawmakers have introduced legislation to

• make permanent the TCJA changes to the child tax credit,
• require taxpayers claiming the child tax credit to also have work-authorized SSNs,
• require that claimants be authorized to work in the United States when claiming the credit,
• require work-authorized SSNs only for the refundable portion of the credit,
• require that only one taxpayer in a married couple filing jointly have a work-authorized SSN, or
• eliminate the work-authorized SSN requirement.

Introduction

The child tax credit was created in 1997 (P.L. 105-34) to reduce the tax liabilities of working families. The Tax Cuts and Jobs Act (TCJA; P.L. 115-97) made temporary changes to the size of the credit and its eligibility requirements starting in tax year 2018. These changes are scheduled to expire at the end of 2025.

The TCJA requires that children for whom filers claim the credit have a work-authorized Social Security number (SSN). While the child tax credit does not have explicit citizenship requirements, this taxpayer identification (ID) requirement impacts the noncitizen population because not all noncitizens are eligible for work authorization and thus do not qualify for work-authorized SSNs.

This report outlines the connection between immigration status, work authorization, and taxpayer IDs (SSNs and individual taxpayer identification numbers [ITINs]). It explains the eligibility criteria for the child tax credit under permanent law and under the TCJA, with a special focus on criteria that impact noncitizens. It concludes with a discussion of selected recent congressional activity.

Overview of Immigration Statuses

The Immigration and Nationality Act (INA; P.L. 82-414)¹ provides for the admission of foreign nationals (also referred to as "aliens" or "noncitizens" in federal law and throughout this report) to the United States. Some foreign nationals are admitted permanently, primarily through the family- or employment-based immigrant system,² and receive lawful permanent resident (LPR) status (commonly referred to as obtaining a green card). Others are admitted as refugees or are granted asylum³ and can later obtain LPR status. Still others are admitted temporarily for specific purposes as nonimmigrants (e.g., tourists, students, temporary workers).⁴ Some foreign nationals are present in the United States in violation of the INA but may be granted discretionary reprieves from removal (e.g., Deferred Action for Childhood Arrivals [DACA]).⁵ In addition, some foreign nationals are present in the United States in violation of the INA and without authorization (sometimes referred to as undocumented); they may have entered without inspection, entered with fraudulent documents, or entered legally but overstayed the terms of their temporary visas.⁶

Noncitizens and Federal Tax Liability

The individual income tax applies to income "from whatever source derived" unless explicitly excluded in the U.S. Internal Revenue Code.⁷ Similarly, payroll taxes generally apply to the wages of all employees, and there is no explicit exception based on immigration status.⁸

Noncitizens may be subject to U.S. income taxes when, for example, they work in the United States or when they live abroad but have U.S.-source income. Noncitizens who may be subject to U.S. income taxes include the following:

• LPRs who are authorized to live and work in the United States permanently (immigrants);
• noncitizens who are authorized to stay in the United States temporarily, and may or may not be authorized to work (nonimmigrants);⁹
• noncitizens who are not authorized to be in the United States (referred to as "unauthorized noncitizens" in this report); and
• foreigners who reside outside of the United States but have U.S. tax obligations.

Taxpayer ID and Immigration Status

The Internal Revenue Service (IRS) requires that all individuals, regardless of immigration status, have a taxpayer identification number to file their federal tax returns, pay taxes, and otherwise comply with federal tax law. For many noncitizens, their taxpayer ID will be an SSN (see below). Those who are ineligible for an SSN are required to use an ITIN instead (see below).

Social Security Numbers (SSNs) and Noncitizens

An SSN is a unique nine-digit number issued by the Social Security Administration (SSA) to U.S. citizens and certain noncitizens who meet applicable requirements.¹⁴ The SSN and accompanying card are issued free of charge.¹⁵

Noncitizens with current employment authorization from the U.S. Department of Homeland Security (DHS), including certain children, may obtain an SSN that indicates their employment authorization status at the time of their initial or subsequent SSN application; this is known as a "work-authorized SSN."¹⁶ (Work-authorized SSNs are also issued to U.S. citizens, including children.¹⁷) Noncitizens who are ineligible for a work-authorized SSN because they are not authorized by DHS to work in the United States but who need an SSN to receive certain public benefits or services may qualify for a "non-work SSN" under certain conditions.¹⁸ Both types of SSNs do not expire and may not indicate a person's current citizenship, immigration, or employment authorization status. In FY2023, SSA issued nearly 2.9 million original (i.e., new) SSNs to noncitizens, of which more than 2.6 million were work-authorized SSNs and about 261,000 were non-work SSNs.¹⁹

Employment Authorization for Noncitizens

In general, noncitizens fall into one of four categories with respect to employment authorization (also referred to as work authorization):

• 1. noncitizens who, by virtue of their age and immigration status, can work anywhere in the United States for any employer (e.g., LPRs, refugees, asylees);
• 2. noncitizens who are authorized to work for a specific employer (e.g., H-2A temporary agricultural workers, who must work for the employer that petitioned for their visa);
• 3. aliens who must apply for employment authorization, which is granted at the discretion of DHS and may include restrictions (e.g., DACA recipients, the spouses of certain nonimmigrant temporary workers); and
• 4. aliens who are ineligible for employment authorization (e.g., tourists, unauthorized noncitizens).²⁰

U.S. Citizenship and Immigration Services (USCIS), a component of DHS, issues Employment Authorization Documents (EADs) to certain noncitizens as evidence that they are authorized to work in the United States.²¹ According to USCIS, "there are no age restrictions for requesting [an EAD]; the EAD functions as an identity document for some noncitizens."²²

Individual Taxpayer Identification Numbers (ITINs)

Since 1996, the IRS has issued ITINs to those who have a tax filing obligation but are not eligible for an SSN.²³ ITINs are for federal tax purposes only, and they enable noncitizens without SSNs to comply with federal tax law. ITINs offer no legal status in the United States, only the logistical ability to file one's taxes. While an SSN cannot expire (even if an individual's work authorization does), an ITIN expires if its holder does not use it to file an income tax return for three consecutive years after the IRS issues it.²⁴

Immigration Status and Tax IDs

The relationship between taxpayer IDs and immigration status is not clear-cut. The use of an ITIN does not necessarily indicate a taxpayer's immigration status. There is limited publicly available data on the characteristics of ITIN filers. In 2010, the Taxpayer Advocate Service said that "the preponderance of ITIN applications from resident aliens employed in the U.S. represent applications from foreign nationals working in the U.S. illegally."²⁵ Some noncitizens who file taxes using ITINs may be in the country lawfully on a nonimmigrant visa but are not eligible to work (and thus not eligible for a work-authorized SSN) because they are a spouse or child of the principal visa holder.²⁶ Others may be unlawfully present in the country. Conversely, some unlawfully present noncitizens may file using a work-authorized SSN they lawfully received in the past (e.g., they may have been lawfully present and authorized to work but overstayed their authorized period of admission).²⁷ Thus, taxpayer IDs cannot be used to determine an individual's immigration status in all cases.

Interagency Information Sharing: Taxpayer IDs

Long-standing privacy laws prohibit the IRS from sharing taxpayers' returns or return information, including their use of an ITIN, with other federal agencies absent an order from a federal judge.²⁸ Further, it may be disadvantageous for the IRS's revenue collection and taxpayer service goals to engage in immigration enforcement. Reporting those who use ITINs to other federal agencies could discourage those in the United States without authorization from meeting their legal tax responsibilities or from claiming any refunds they may be due.

Child Tax Credit

The Taxpayer Relief Act of 1997 (P.L. 105-34) introduced the child tax credit to reduce the tax liabilities of working families. Congress has altered the credit several times in the years since, primarily by expanding its size and eligibility criteria.²⁹ In late 2017, Congress substantially reformed the credit as part of the Tax Cuts and Jobs Act (TCJA; P.L. 115-97). The law generally expanded the size of and eligibility criteria for the credit while limiting the amount that low-income households could receive as a tax refund. However, the TCJA also contracted eligibility by requiring that families provide work-authorized SSNs for the children used to claim the credit (see the "Taxpayer ID Requirements for the Child Tax Credit" section). The TCJA scheduled all these changes to expire at the end of 2025.³⁰

Child Tax Credit Eligibility Criteria

Under both the TCJA and permanent law, filers can only claim the child tax credit for children who are (1) under age 17, (2) claimed as dependents on the filers' tax returns, and (3) "qualifying children" for purposes of dependency status. A qualifying child must be the filer's son, daughter, stepchild, adopted child, eligible foster child, brother, sister, stepbrother, stepsister, half-brother, half-sister, or a descendant of one of these (e.g., grandchild, niece, nephew). Additionally, qualifying children must not provide more than half of their own financial support during the year; if married, must not file a joint return with their spouse (or file it only to claim a refund of withheld tax or estimated tax paid); and must be U.S. citizens, nationals, or residents. Generally, children must also live with the taxpayer for more than half the year.³¹

Taxpayer ID Requirements for the Child Tax Credit

Prior to enactment of the TCJA changes in 2018, filers claiming the child tax credit could provide either ITINs or SSNs for themselves and the children for whom they claimed the credit. The TCJA requires that children for whom the credit is claimed have a work-authorized SSN.³² No similar requirement was placed on the tax filers themselves. According to some lawmakers, the work-authorized SSN requirement is intended to prevent unauthorized noncitizens from claiming the child tax credit.³³ This is a temporary change in effect from 2018 through the end of 2025. Absent any legislative changes, ITINs and SSNs (both work-authorized SSNs and non-work SSNs) will serve as valid taxpayer IDs for qualifying children beginning in 2026.

Requiring a work-authorized SSN to claim a tax benefit has precedent. The fully refundable earned income tax credit generally requires that claimants provide work-authorized SSNs for everyone in their household, including earners and dependents.³⁴ No other individual income tax benefits require a work-authorized SSN.

Other Child Tax Credit Changes in the TCJA

The TCJA made various changes to the child tax credit (summarized in Table 1), all of which are scheduled to expire at the end of 2025. The law increased the maximum value of the credit per child from $1,000 to $2,000. It made the credit partially rather than fully refundable: in 2024 and 2025, households may receive up to $1,700 per child as a tax refund if their credit exceeds their income tax liability. This level is adjusted annually for inflation. The TCJA also raised the income thresholds at which the credit begins to phase out, meaning some taxpayers whose income was previously too high to qualify for the credit can now receive it. The TCJA scheduled the credit to revert to its pre-2018 parameters from tax year 2026 onward.

Other Changes Relevant to Families With Children Without SSNs

The TCJA's expansion of the child tax credit for families with children who do have work-authorized SSNs offset the suspension of another child-related tax benefit—personal exemptions for dependents—that families could claim before 2018.³⁵ Personal exemptions were deductions that taxpayers could claim for each person in their household, including dependents. The personal exemption amount was scheduled to be $4,150 in 2018 (adjusted annually for inflation), before its suspension through the end of tax year 2025.

The suspension of personal exemptions for dependents raised the taxable incomes of taxpayers with dependents, including taxpayers whose children do not have work-authorized SSNs. Such families do not benefit from the larger child tax credit that offset much or all of this loss, nor can they receive the smaller child tax credit that existed before 2018.

The TCJA also created a $500 nonrefundable credit for other dependents. This credit is available to those who have dependents who do not qualify for the child tax credit, including children who do not have work-authorized SSNs. The credit for other dependents is scheduled to expire after tax year 2025.

Impact of TCJA Changes to the Child Tax Credit

The Tax Policy Center (TPC) estimated that roughly 48 million households received the child tax credit or the credit for other dependents in tax year 2022 (the most recent year it has estimated).³⁶ TPC also estimated that roughly 30 million households will receive the child tax credit after these changes expire in 2026.³⁷ Fewer households will qualify for the credit if its income threshold reverts to pre-2018 levels. Many of those who are scheduled to lose eligibility for the child tax credit would regain eligibility for personal exemptions for their dependents (as would those who continue to qualify for the child tax credit).

The Joint Committee on Taxation (JCT) estimated in December 2017 that implementing the child tax credit's work-authorized SSN requirement alongside the TCJA's other changes would reduce deficits by $29.9 billion from FY2018-FY2027.³⁸ In May 2024, the JCT projected that extending all of the TCJA's child tax credit changes through 2035 would increase deficits (before accounting for the costs of servicing the additional debt) by $748 billion, but that extending the work-authorized SSN requirement would offset $12 billion (2%) of this loss.³⁹ CRS estimates that, based on JCT's figures, the work-authorized SSN requirement reduces the fiscal cost of the child tax credit (including credit provisions predating the TCJA) and the credit for other dependents by roughly 1%.⁴⁰

Selected Recent Congressional Activity

Lawmakers have proposed a variety of reforms to the child tax credit's work-authorized SSN requirement. This section provides a summary of the major proposals introduced in federal legislation since enactment of the TCJA, with recent examples of legislation that would enact each proposal. This list is not comprehensive: it does not include all legislation that would make a change to the requirement, nor does it include every version of a bill that has been introduced in multiple chambers or in multiple sessions of Congress. Some legislation mentioned may also include multiple changes to the taxpayer ID requirement. The list is intended to illustrate the range of proposals lawmakers have introduced since passage of the TCJA.⁴¹

Since the TCJA was passed in 2017, multiple pieces of legislation have been introduced that would make permanent that law's work-authorized SSN requirement for the child tax credit. Some bills, such as S. 1226 and the TCJA Permanency Act (H.R. 976) in the 118^th Congress, would do so in the context of making permanent all or most of the temporary individual income tax provisions in the TCJA. Others, such as the Providing for Life Act of 2023 (S. 74; 118^th Congress), would do so while changing other parameters of the child tax credit.

Lawmakers have proposed requiring that taxpayers claiming the child tax credit (i.e., the adults claiming the credit, not only the child for whom the credit is claimed) also have work-authorized SSNs. Such legislation includes the Safeguarding American Workers' Benefits Act (H.R. 7991; 118^th Congress) and the Removing Waste and Protecting Medicare Act (H.R. 6144; 117^th Congress). Other legislation proposes this as well but would make certain exceptions. For example, the Child Tax Credit Integrity Act (H.R. 7813; 118^th Congress), would allow married couples filing jointly with at least one spouse in the Armed Forces to claim the credit even if only one spouse has a work-authorized SSN. Other bills, such as the Family Security Act (S. 5256; 118^th Congress), would generally require that one taxpayer in a married couple filing jointly have a work-authorized SSN.

Lawmakers may also seek to require not only that the taxpayer's SSN be work-authorized when it was issued but also that claimants be authorized to work in the United States at the time of claiming the credit. Legislation from the 118^th Congress that would do so includes the WALL Act of 2024 (H.R. 7229).

Other legislation has had more limited scope. For example, some bills would require that filers include their own work-authorized SSN only to claim the refundable portion of the credit, meaning that taxpayers without work-authorized SSNs could still claim the child tax credit as though it were a nonrefundable credit. Examples of such bills from the 117^th Congress include the Refundable Child Tax Credit Eligibility Verification Reform Act (H.R. 663) and the EITC and ACTC Eligibility Verification Act (H.R. 4482).

Some legislation would extend the child tax credit to new populations. For example, the Child Tax Credit for Pregnant Moms Act of 2023 (S. 2092; 118^th Congress) would extend the child tax credit to families who experienced a miscarriage or a stillbirth, provided at least one of the taxpayers has a work-authorized SSN.

Lawmakers have also proposed eliminating the TCJA's work-authorized SSN requirement for children before its scheduled expiration at the end of 2025. Bills that would do so include the American Family Act (H.R. 3899; 118^th Congress) and the PRO-LIFE Act of 2022 (H.R. 8862; 117^th Congress). Other legislation, such as the End Child Poverty Act (H.R. 6598; 117^th Congress), would replace the child tax credit with a new benefit that would not require the child for whom it is claimed to have a work-authorized SSN.

Footnotes