Democrats call on IRS to extend child tax credit deadlines for taxpayers without SSNs

A group of Democratic senators on Thursday called on the IRS to extend the filing deadline for taxpayers without a Social Security number to obtain the enhanced child tax credit (CTC).

The extension is warranted, according to the senators, because processing delays at the IRS have meant that “numerous families” have been unable to process their Individual Taxpayer Identification Number (ITIN).

ITINs are used by foreign nationals who are subject to U.S. taxation, but not eligible for a Social Security number.

In a letter to Treasury Secretary Janet Yellen and IRS Commissioner Charles Rettig, the senators called on the administration to hold the child tax credit for families who have applied for their ITINs but haven’t received them due to delays.

“We are concerned to learn that there may be numerous families that had hoped to file for and receive the enhanced child tax credit, but were unable to do so because of Individual Taxpayer Identification Number processing backlogs,” wrote the senators, led by Sen. Bob Menéndez (D-N.J.).

“In order to remedy this situation, we ask that you allow families who applied for an ITIN or ITIN renewal prior to April 15, 2022 to file for and receive the advanced CTC, if they file a return before or on October 15, 2022,” they added.

The enhanced CTC is part of the pandemic relief package signed into law by President Biden in March 2021, and provides up to $3,600 for children under the age of 6, depending on the parents’ income.

While ITINs are only handed out to foreign nationals, ITIN-holding parents can only apply for the tax credit if their child is a U.S. national with a valid Social Security number.

In 2021, the IRS received more than a million ITIN applications, causing a severe backlog.

“According to the Treasury Inspector General of Tax Administration (TIGTA), prior to the COVID-19 pandemic, typical processing times for ITIN applications ranged from seven weeks during non-peak times and 11 weeks during tax time. But, as reported by TIGTA and the IRS’ own website, processing times have increased—with ITIN application processing averaging a three to four months and renewal times doubling to 41 days,” wrote Menéndez.

The letter was also signed by Sens. Catherine Cortez-Masto (D-Nev.), Ben Ray Luján (D-N.M.), Alex Padilla (D-Calif.), Bernie Sanders (I-Vt.), Chris Van Hollen (D-Md.) and Elizabeth Warren (D-Mass.).

ITINs were legislated in the 1990s to allow foreign nationals subject to U.S. tax laws to pay the IRS, including the spouses of visa holders, foreigners residing abroad with business interests in the United States and undocumented immigrants.

According to the IRS’s Taxpayer Advocate Service, ITINs in 2019 amounted to a $2.8 billion surplus for U.S. coffers after paid taxes and credits were computed.

According to the Annie E. Casey Foundation, about a quarter of all U.S. children — more than 18 million — are part of an immigrant family, and 90 percent of all children in immigrant families are U.S. citizens.

Of those 18 million, 5.8 million U.S. citizens are child dependents of non-citizen foreign nationals, according to the Vera Institute of Justice.

The senators called on Yellen and Rettig to extend the ITIN deadline based in part on research showing the enhanced CTC kept millions of children out of poverty during the coronavirus pandemic.

“Researchers estimate that the first enhanced CTC payment—made last July—kept approximately 3 million children out of poverty and reduced the monthly child poverty rate from 15.8 percent to 11.9 percent. After such a historic investment in families, limiting the access of certain families due to unprecedented processing delays would be an unfortunate oversight,” wrote the senators.