Reconciliation recommendation related to a Social Security Number Required to Claim the Refundable Portion of the Child Tax Credit

Cost Estimate
April 24, 2012

As approved by the House Committee on Ways and Means on April 18, 2012

H. Con. Res. 112, the Concurrent Budget Resolution for fiscal year 2013, as passed by the House of Representatives on March 29, 2012, instructed several committees of the House to recommend legislative changes that would reduce deficits over the 2012-2022 period. As part of that reconciliation process, the House Committee on Ways and Means has approved three separate provisions as reconciliation recommendations. The following analysis presents estimated budgetary effects for one of those three provisions.

The legislation would require taxpayers to provide their Social Security Number (SSN) in order to claim the refundable portion of the child tax credit. The staff of the Joint Committee on Taxation (JCT) estimates that the legislation would have no budgetary impact in 2012 or 2013, but would reduce outlays by $3.7 billion over the 2012-2017 period and by $7.6 billion over the 2012-2022 period. Because the legislation would have no budgetary impact in 2012 or 2013, those estimates would be the same for any enactment date this year.

Under current law, taxpayers who have either an individual taxpayer identification number or an SSN and include it on their income tax return can claim a tax credit—$1,000 this year and $500 starting in 2013—for each of their qualifying children under the age of 17. If the credit exceeds the tax liability of the taxpayer, the excess may be refunded depending on the taxpayer’s earnings, and the refunded portion is classified as an outlay in the federal budget. The legislation would allow only taxpayers who provide their SSN to claim the refundable portion of the credit, starting in 2013.