Saving American Workers’ Benefits Act of 2025

Bill Number

S. 268

Origin Chamber

Senate

Congress

119th Congress, Session 1

Policy Area

Taxation

Status

Introduced

Latest Action

2025-01-28: Read twice and referred to the Committee on Finance.

Last Updated

2025-04-07T16:29:29Z

AI-Generated Summary

Purpose of the Legislation

The "Saving American Workers' Benefits Act of 2025" aims to restrict eligibility for the Child Tax Credit (CTC) and Earned Income Tax Credit (EITC) by requiring valid Social Security Numbers (SSNs) that confirm work authorization in the United States. This ensures these tax benefits are available only to U.S. citizens and certain authorized non-citizens, preventing claims by individuals without legal work permission.

Key Provisions

• Child Tax Credit Requirements (Section 2):
• Taxpayers must provide SSNs for themselves (and their spouse if filing jointly) and any qualifying child on their tax return to claim the CTC.
• The SSN must be issued by the Social Security Administration to a U.S. citizen or a non-citizen under specific provisions of the Social Security Act that allow work authorization.
• The SSN must be obtained before the tax return due date and must explicitly indicate the holder is authorized to work in the U.S.
• No credit is allowed if these requirements are not met.
• Updates IRS "math error" procedures (under Section 6213(g)(2)) to treat missing or invalid SSNs as errors for quicker corrections, similar to how Taxpayer Identification Numbers (TINs, like Individual Taxpayer Identification Numbers or ITINs) are handled.
• Removes an outdated conforming rule in the CTC section.

• Earned Income Tax Credit Requirements (Section 3):
• Similar SSN rules apply to EITC claimants and their qualifying children.
• Explicitly excludes SSNs that do not confirm work authorization, building on existing law.

• Effective Date:
• Changes apply to tax years starting after December 31, 2025.

Significant Changes to Existing Law

• Tightened SSN Rules: Previously, CTC and EITC rules allowed certain non-work SSNs (e.g., those issued under broader Social Security Act provisions without work authorization). This bill narrows eligibility by mandating SSNs that specifically verify work permission, effectively excluding ITINs or other non-work numbers for these credits.
• Enhanced IRS Enforcement: Expands "math error authority" to include SSN mismatches, allowing the IRS to deny or adjust claims without full audits, streamlining processing but increasing scrutiny.
• Removal of Exceptions: Strikes a prior paragraph in the CTC rules that may have allowed limited workarounds, making requirements stricter overall.

Potential Impacts

• On Government Agencies: The IRS will face increased administrative workload for verifying SSNs during tax processing, potentially reducing improper payments but requiring updates to tax forms and software. This could lower federal spending on these credits by billions annually through reduced eligibility.
• On Citizens and Residents: U.S. citizens and work-authorized immigrants will see no change in eligibility, but mixed-status families (e.g., with undocumented children or parents) may lose partial or full credits, affecting low-income households' financial support for child-rearing and earned income supplementation.
• On International Relations: Minimal direct impact, though it reinforces U.S. immigration enforcement, which could influence perceptions of U.S. policy toward undocumented immigrants from other countries.

Main Stakeholders Affected

• Taxpayers Claiming Credits: Primarily low- and moderate-income families with children, including working parents eligible for EITC and families seeking CTC refunds. Undocumented immigrants or those without work authorization (and their U.S.-citizen children) will be most directly excluded.
• Immigrant Communities: Non-citizens without work-authorized SSNs, such as certain visa holders or undocumented individuals, lose access to these benefits.
• U.S. Government: The IRS and Treasury Department handle implementation; Congress and taxpayers fund the credits.
• Employers and Social Services: Indirectly affected, as reduced family income could increase reliance on other aid programs.

Notable Legal, Constitutional, or Political Implications

• Legal Implications: Strengthens tax code alignment with immigration law by using SSN work authorization as a eligibility gatekeeper, potentially reducing fraud but inviting challenges over disparate treatment of non-citizens. Courts may review if exclusions violate equal protection principles for U.S.-citizen children of undocumented parents.
• Constitutional Implications: No direct conflict with the Constitution, as tax benefits are not entitlements, but it could raise due process concerns in IRS denial procedures. The bill avoids retroactivity by applying only to future tax years.
• Political Implications: Positions the legislation as protecting "American workers' benefits" amid debates on immigration and welfare, likely appealing to enforcement advocates while drawing criticism for penalizing families and complicating tax compliance for vulnerable groups.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Sen. Hyde-Smith, Cindy [R-MS]

Cosponsors (1)

Sen. Lee, Mike [R-UT]

Recent Actions

• 2025-01-28: Read twice and referred to the Committee on Finance.
• 2025-01-28: Introduced in Senate

Bill Versions

• Saving American Workers’ Benefits Act of 2025 — issued 2025-01-28 — PDF (4 pages)