Illegal Immigrants Eligible for Up To Eight Refundable Tax Credits

Expert: Tax credits for those here illegally amount to more than $5 billion a year

A member of the National Guard checks on his colleague inside a Border Patrol Skybox near the Hidalgo International Bridge in Hidalgo, Texas / AP

Illegal immigrants are eligible to claim up to eight refundable tax credits under federal law, according to a report from the Congressional Research Service.

One of the tax credits available to illegal immigrants under the Internal Revenue Code is the additional child tax credit, which allows families with children to reduce their tax liability by $1,000 per child. If the value exceeds the tax liability they owe, the family receives a refund for the difference.

"The Tax Inspector General of Treasury says that the extra child tax credit, in a single year, doles out $4.2 billion a year to illegals," said David North, a fellow at the Center for Immigration Studies. "Based on that number I would assume that other tax credits for illegals runs well over $5 billion a year."

In addition, illegal immigrants are eligible for the earned income tax credit, which allows low-income families to receive a refundable tax credit even if they do not owe any taxes.

They are also eligible for the American Opportunity Tax Credit, which is a tax credit for tuition, and the Health Coverage Tax Credit, which is a tax credit for insurance costs. Undocumented immigrants can also receive a tax credit for tax withheld on wages, for fuel excise taxes, any overpayment of taxes, and tax withheld at source for nonresident aliens and foreign corporations.

Refundable credits can be larger than an individual’s tax liability, which means that illegal immigrants may receive the difference as a cash payment from the IRS. Nothing in the Internal Revenue Code prohibits illegal immigrants from receiving these tax credits.

"Speaking generally, the Treasury Department is as casual about the negative impacts of illegal aliens as are other parts of the Obama administration, but with a twist," says North. "Only the Treasury pays illegal aliens to stay largely through the various refundable tax credits."

"If the IRS were not grinding out billions in refunds to the illegals, some would—without any other pressure—decide to go home," North said. "And the end to these payments would also meet another goal—more money to pay off the national debt."

"Congress could do something about this," said North. "Treasury could do something, but neither have."

UPDATE 4:44 P.M.: An earlier version of this post quoted David North as saying tax credits for illegal immigrants amount to more than $10 billion a year. North estimates the tax credits run over $5 billion a year.