WASHINGTON–Sens. Chuck Grassley of Iowa, Mike Enzi of Wyoming, Mike Crapo of Idaho, Jim Inhofe of Oklahoma, David Perdue of Georgia, Tim Scott of South Carolina, Pat Roberts of Kansas, Johnny Isakson of Georgia, Jim Risch of Idaho, John Boozman of Arkansas and John Cornyn of Texas today introduced legislation to disallow the Earned Income Tax Credit for those made newly eligible for past benefits under the President’s executive actions on immigration. 

“This tax credit is meant to help the working poor get into the workforce,” Grassley said. “It isn’t meant to benefit individuals who aren’t authorized to work in the United States.  Congress implemented that policy in 1996. The legislation introduced today upholds the principle that many of us in Congress support. The tax code shouldn’t reward those who broke our immigration laws.”

“Congress should always be looking to protect the tax dollars of hard working Americans. This legislation would ensure that those individuals who were not here legally cannot use their new status to claim tax credits that they were not entitled to,” said Enzi.

“Unfairly rewarding individuals who entered the country illegally with retroactive tax benefits undermines our immigration system and discourages those who seek to come to America from doing so through the proper legal channels,” said Crapo. “This legislation will prohibit the Administration from manipulating the Earned Income Tax Credit as a way to further advance its unilateral immigration policy agenda.”

“President Obama’s illegal executive amnesty has many negative consequences, and this tax loophole is one of them,” said Perdue. “I urge my Senate colleagues to stop the President’s unconstitutional actions, and preventing these benefits from going to those who broke our immigration laws and were granted amnesty is an important step.”

“To reward individuals who are in this country illegally, and to do so with hardworking taxpayers’ dollars, is incomprehensible and unacceptable,” said Isakson, a member of the Senate Committee on Finance with jurisdiction over tax policy and the Internal Revenue Service (IRS). “Yet millions of individuals benefiting from the president’s unconstitutional executive amnesty could become eligible to claim a tax credit based on a questionable interpretation of tax rules by the IRS. I will continue to do all that I can to stop this executive immigration overreach and will fight to prevent the IRS from doling out hundreds of millions of taxpayer dollars to those who broke our immigration laws.”

“This bill will benefit the millions of hardworking Americans who pay their fair share of taxes, which contribute to our roads, schools, and the safety of this country,” said Risch. “Providing tax credits to people who are living in our country and enjoying those benefits without paying taxes isn’t right or fair. We cannot reward people who come to our country by breaking the law.”

“The IRS seems inclined to allow individuals benefitting from the President’s unconstitutional and unilateral actions on immigration to claim billions of dollars in tax benefits for unauthorized work. This bill closes a loophole that allows illegal immigrants to take advantage of the system and claim a refund financed by hardworking Americans,” Boozman said.

The bill denies the Earned Income Tax Credit to individuals granted deferred action under the 2014 executive actions, and any similar actions going forward, for any period in which they performed work illegally in the United States. This bill is intended to close a loophole created by a 2000 IRS interpretation that has the effect of allowing those receiving deferred action to qualify for a credit they were previously denied or otherwise ineligible for at the time.  It is consistent with policy put in place in 1996 intended to deny the credit to those not authorized to work in the United States. 

This legislation would accomplish this by denying the credit to those receiving deferred action unless they were eligible to claim the credit for the year in question and were authorized to engage in employment in the United States for the entire taxable year.  This rule would apply to the year in which they are granted deferred action and for all previous returns.  To help the IRS administer this rule, information sharing requirements between the Department of Homeland Security, the Social Security Administration and the IRS are established.  

The non-partisan Joint Committee on Taxation has estimated that this proposal will save $1.7 billion over ten years in payments that otherwise would have gone out.  The actual amount of Earned Income Tax Credit payments going to those receiving deferred action could be much greater than $1.7 billion over 10 years, however.  The score is based on the premise that it will take a year for the IRS to update its systems to account for this change.