HYDE-SMITH OFFERS NEW BILL TO KEEP ILLEGALS FROM CLAIMING TAX CREDITS IMPROPERLY

HYDE-SMITH OFFERS NEW BILL TO KEEP ILLEGALS FROM CLAIMING TAX CREDITS IMPROPERLY

New Legislation Builds on Success in Closing Child Tax Credit Loophole, Saving Taxpayers Billions

WASHINGTON, D.C. - U.S. Senator Cindy Hyde-Smith (R-Miss.) has introduced new legislation to build on her successful effort to ensure those in the nation illegally are not improperly collecting government-funded tax credits, a problem that costs American taxpayers billions of dollars annually.

The Status Eligibility Confirmation and Updated Requirements for Earned (SECURE) Benefits Act (S.2974) would build on Hyde-Smith's Safeguarding American Workers' Benefits Act to close federal tax loopholes that allow illegal immigrants to claim the Child Tax Credit, which became law as part of the One Big Beautiful Bill, saving taxpayers nearly $28 billion.

"Our work is not done because the more you study this issue, the more apparent it becomes that billions of dollars in federal tax credits are being claimed improperly by illegal immigrants," Hyde-Smith said. "The SECURE Benefits Act would do more to stop these improper payments by having federal agencies work with each other to recognize voided Social Security numbers for migrants who overstay their visa or lose their work authorization."

S.2974 would save taxpayers $14.6 billion by closing loopholes across all major refundable tax credits intended for students, struggling working families, and retirees. Coupled with the $27.8 billion saved through the Saving American Workers' Benefits Act, taxpayers would see a total savings of $42.4 billion if the SECURE Benefits Act were to be signed into law.

Beyond the Child Tax Credit, Hyde-Smith's legislation takes aim at access to the American Opportunity Tax Credit, the Earned Income Tax Credit, and the Saver's Match, among others.

Today, an immigrant can claim certain tax credits after securing a temporary work visa from the Department of Homeland Security (DHS) and a work-eligible Social Security Number (SSN) from the Social Security Administration (SSA). However, if their work authorization expires, the SSN stays valid. This means people without legal status can still use that SSN to claim refundable tax credits.

The SECURE Benefits Act would bring clarity, integrity, and fairness to the U.S. tax system by applying two straightforward rules:

1. Anyone claiming a refundable tax credit, including dependents and spouses on joint returns, must have an SSN that is valid for work. Neither Individual Taxpayer Identification Numbers (ITINs) nor expired SSNs are allowed.
2. If the SSN was issued based on temporary work status, it must still be valid at the time the credit is claimed, verified in real-time by the DHS, SSA, and the Internal Revenue Service (IRS).

The bill would establish a system for DHS to share work-authorization data with the SSA and IRS, which would allow the IRS to verify whether noncitizens on temporary work visas who are claiming certain individual refundable tax credits have current, valid work authorization.

"In this day and age with all the technology we have, there's really no excuse for federal agencies not to verify the legal status before issuing billions of dollars in taxpayer-funded government checks," Hyde-Smith said. "I don't think this is too much to ask and that it's what most Americans would expect of their government."

The One Big Beautiful Bill prevented the Child Tax Credit from being cut in half, permanently expanded the credit to $2,200, and allowed it to grow in the future by tying the credit to the inflation rate. The law also included a provision from Hyde-Smith's Saving American Workers' Benefits Act that strengthened eligibility requirements to combat the billions of dollars of fraudulently claimed credits by illegal immigrants.

A section-by-section summary of the SECURE Benefits Act is available here.

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