Why do illegals file tax returns?

Posted on: April 17, 2017 at 08:48:28 CT

Federal government data shows that while roughly half of illegal immigrants file federal tax returns, the vast majority of them don’t pay any federal income taxes. Instead, they use these returns to claim refundable tax credits, which are a form of cash welfare. In other words, illegal immigrants mainly use the federal income tax code to collect money from U.S. citizens.

Obtaining an ITIN also allows illegal immigrants to claim the federal Child Tax Credit, which can provide them with a cash benefit of up to $1,000 per child per year. According to the latest IRS data, 72 percent of all tax returns filed with ITINs in 2010 claimed child tax credits to receive cash payments from the federal government.

In 2010, ITIN filers paid a total of $0.9 billion in income taxes and received cash payments of $4.9 billion. In other words, ITIN filers received 5.4 times more cash than they paid in income taxes. Most of this cash—$4.0 billion of it—came through child tax credits. Since these figures include foreign investors who are not eligible for child tax credits, it is possible that little-to-none of the taxes paid came from illegal immigrants.