The House has passed legislation that would require taxpayers to provide a Social Security number to claim the Child Tax Credit in an effort to discourage fraud, as well as adjust the amount of the credit for inflation.
The bill, H.R. 4936, the Child Tax Credit Improvement Act, would index for inflation the amount of the refundable tax credit, which is currently set at $1,000. The legislation was introduced by Rep. Sam Johnson, R-Texas.
“It’s a great honor to have my important commonsense measure included in the bill passed by the House today,” Johnson said in a statement Friday. “More importantly, it’s a great day for hardworking Americans when their tax dollars are protected. I urge the President and Senate Democrats to stop playing politics with taxpayer dollars and recognize the importance of this measure.”
Johnson’s provision would require tax filers to provide their Social Security numbers to claim the Child Tax Credit. He noted that this is the requirement that the IRS currently uses for the refundable Earned Income Tax Credit. In addition, Congress included the fraud prevention measure in the 1996 Welfare Reform law signed by President Clinton, Johnson pointed out, and the House has passed a version of Johnson’s bill three times in the previous Congress.
House Ways and Means Committee chairman Dave Camp, R-Mich., noted that indexing the tax credit for inflation would help couples who jointly file their tax returns. “Making a commonsense change like this will ensure that families can make every dollar count,” he said. “The current Child Tax Credit also disadvantages those who file jointly compared to those who file as single individuals, creating what is known as the marriage penalty. This bill would eliminate the marriage penalty embedded in the child credit, helping millions of families across the country.”
Camp added that the bill’s anti-fraud provisions would ensure that the Child Tax Credit goes to those who are “truly deserving.”
“The bill would require one parent to submit a Social Security Number to qualify for the refundable portion of the Child Tax Credit,” he said.
Camp cited a report by the Treasury Inspector General for Tax Administration that found the number of filers for the Additional Child Tax Credit without a Social Security Number grew from 62,000 filers (claiming $62 million in benefits) in 2000 to 2.3 million filers (claiming $4.2 billion in benefits) in 2010.
“This is a commonsense provision that will help safeguard taxpayer dollars from fraud, and put it in line with other refundable tax credits, like the Earned Income Tax Credit, which require a Social Security number,” said Camp. “I hear too many stories about families struggling to afford basic necessities to care for their children. It is time we make some simple improvements to the Child Tax Credit, so it keeps up with the cost of raising children.”
Camp’s Democratic counterpart on the Ways and Means Committee, ranking member Sander Levin, D-Mich., argued, however, that the Social Security number requirement would make it harder for many low-income taxpayers to claim the credit.
“This bill leads to harm for millions of low- and middle-income families and their children,” said Levin in a statement Friday on the floor of the House. “It completely ignores the need to extend the 2017 expiration of the expanded refundable portion of the Child Tax Credit, which if allowed to occur would push 12 million people, including 6 million children, into poverty or deeper into poverty, according to the Center on Budget and Policy Priorities. Republicans may say that such an extension could be done later, as they claimed in our discussion at the Rules Committee. But that talk about future action is made incredulous when Republicans this week add another $187 billion to the deficit, bringing the total they have passed in unpaid-for tax cuts to more than $700 billion. This comes after Republicans have slashed non-defense domestic discretionary spending to its lowest level on record as a percentage of GDP."
Levin said the bill would make the credit available on a permanent basis to more families in the upper middle-income range while reducing tax refunds for lower-income families.
"In contrast, this bill expands and makes permanent the availability of the Child Tax Credit to many new, upper middle-income families whose incomes are too high to qualify under current law," said Levin. "Under this legislation, a married couple making $160,000 with two children would get an additional $2,200 in their 2018 tax refund, according to the Center on Budget and Policy Priorities. A single mother of two making $14,500 would see her refund cut by $1,750. It gets worse. Republicans this week inserted a provision into this legislation requiring recipients of the Child Tax Credit to provide their Social Security number—a change that could lead to the loss of the Child Tax Credit for the families of five million children, four million of whom are U.S. citizens. In all, 400,000 veteran and armed forces families will lose all or part of their credit. There’s a reason that United States Conference of Catholic Bishops opposes this requirement—because it is a deeply flawed proposal that would leave millions of families with children behind.”
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