Illegal Aliens Claiming Child Tax
Credit on Children not Living in U.S.
Allegations that child tax credit are being
claimed by illegal aliens for children living outside the U.S.
Determination: Real but with New Eligibility Updates
was a tax loop hole that was costing the American taxpayer $4.2 billion,
according to a July 7, 2011
audit report by the Treasury Department.
All workers in the U.S., legal or illegal, are required to report income to the
Internal Revenue Service (IRS), and non-citizens are issued a tax identification
number, which the IRS refers to as ITIN.
The report said, "Although the law prohibits aliens residing without
authorization in the United States from receiving most Federal public benefits,
an increasing number of these individuals are filing tax returns claiming the
Additional Child Tax Credit (ACTC), a refundable tax credit intended for working
families. The payment of Federal funds through this tax benefit appears to
provide an additional incentive for aliens to enter, reside, and work in the
United States without authorization, which contradicts Federal law and policy to
remove such incentives."
The iRumorMill.com Crew visited the
IRS website and found that the agency has updated the standards for
eligibility for tax credits.
IRS Tax Tip 2011-29, February 10, 2011
The Child Tax Credit is an important tax credit that may be worth as much as
$1,000 per qualifying child depending upon your income. Here are 10 important
facts from the IRS about this credit and how it may benefit your family.
With the Child Tax Credit, you may be able to
reduce your federal income tax by up to $1,000
for each qualifying child under the age of 17.
A qualifying child for this credit is someone
who meets the qualifying criteria of six tests:
age, relationship, support, dependent,
citizenship, and residence.
To qualify, a child must have been under age 17
– age 16 or younger – at the end of 2010.
To claim a child for purposes of the Child Tax
Credit, they must either be your son, daughter,
stepchild, foster child, brother, sister,
stepbrother, stepsister or a descendant of any
of these individuals, which includes your
grandchild, niece or nephew. An adopted child is
always treated as your own child. An adopted
child includes a child lawfully placed with you
for legal adoption.
In order to claim a child for this credit, the
child must not have provided more than half of
their own support.
You must claim the child as a dependent on your
federal tax return.
To meet the citizenship test, the child must be
a U.S. citizen, U.S. national, or U.S. resident
The child must have lived with you for more than
half of 2010. There are some exceptions to the
residence test, which can be found in IRS
Publication 972, Child Tax Credit.
The credit is limited if your modified adjusted
gross income is above a certain amount. The
amount at which this phase-out begins varies
depending on your filing status. For married
taxpayers filing a joint return, the phase-out
begins at $110,000. For married taxpayers filing
a separate return, it begins at $55,000. For all
other taxpayers, the phase-out begins at
$75,000. In addition, the Child Tax Credit is
generally limited by the amount of the income
tax you owe as well as any alternative minimum
tax you owe.
Additional Child Tax Credit-
If the amount of your Child Tax Credit is
greater than the amount of income tax you owe,
you may be able to claim the Additional Child