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Pathways to Prosperity

Exploring the Barriers to and Potential Impact of Improved Take-Up of the Child Tax Credit and the Earned Income Tax Credit Among Immigrant Families

The Child Tax Credit (CTC) and Earned Income Tax Credit (EITC) are crucial anti-poverty tools designed to help workers and their families. A large body of research demonstrates the significant, positive effects of the CTC and EITC on household economic security, health, and education outcomes, among others. Despite being eligible, many individuals—including a disproportionate share of eligible immigrants—do not claim these credits for a variety of reasons, lessening the credits’ efficacy in reducing poverty while boosting workforce participation.

This brief builds on BPC’s prior research on the CTC and EITC to explore the effects of increased take-up of both programs among eligible immigrant families in the United States, which is home to approximately 45 million people born in another country. It examines the existing literature to reveal opportunities for further research on the positive impacts of these programs for immigrant families, and then explores the particular barriers to tax credit take-up affecting this diverse community. The brief presents a simulation of the economic returns on increased CTC and EITC take-up by low-to-moderate-income immigrant households with children and finds that doing so could yield short-run returns to U.S. economic growth and labor force participation.

Simulating the Effects of Immigrant Parents’ Take-Up of the CTC and EITC on Employment and GDP

Increase in Take-Up Rate to 85% 5 percentage points 10 percentage points 15 percentage points
Change in Tax Revenue −$1.6 billion −$2.6 billion −$4.2 billion
Change in Full-Time Employment 4,000 8,000 12,000
Change in GDP $1.0 billion $1.9 billion $2.9 billion

Note: The three simulations demonstrate an improved take-up rate of 85% from the three simulated baseline take-up rates of 70%, 75%, and 80%.

Source: BPC analysis

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