Speech #1090135723

Under the tax law. resident aliens are citizens of a foreign country who are either lawful permanent residents of the United States or have been physically present in the country for at least a certain specified amount of time during the past 3 years. They are taxed in the same manner as U.S. citizens. and thus they qualify for the refundable tax credits. According to the IRS. under the residency rules of the Tax Code. any alien who is a nonresident alienan alien will become a resident alien in one of three ways: No. 1. by being admitted to the United States as or changing in status to a lawful permanent resident under the immigration laws. No. 2. by passing a substantial presence test. a numerical formula which measures days of presence in the United States. or No. 3. by making what is called the first year election. a numerical formula under which an alien may pass the substantial presence test 1 year earlier than under the normal rules. Under these rules. legally present workauthorized aliens who pass the substantial presence test will be treated. for tax purposes. as resident aliens. They are able. then. to claim EITC. Under these rules. even an undocumented illegal alien who passes the substantial presence test will be treated for tax purposes as a resident alien. If they are using a fraudulent Social Security number. they can apply for the EITC. If they are using a legal IDIF number. they cannot apply. Under S. 2611. the bill before us today. if illegal aliens pay their taxes legally today. they do so with an individual taxpayer identification number they are given for tax purposes. The ITIN cannot currently be used to get the EITC because a Social Security number is required to claim the EITC. They are not eligible to get a Social Security number. 152. Pt. 7 8999 So under S. 2611. illegal aliens will become legally present and work authorized immediately upon passage of the act. They would then be given Social Security numbers and will pass the substantial presence test. making them automatically. at once. eligible to claim the very generous benefits of the EITC. The Congressional Budget Office has looked at this and tried to figure out what the cost would be.