Tax Scam: Child Social Security Numbers

RENO, NV - Preschoolers are just learning to count, but there's one number that's been following them since they were babies.

It's a Social Security number, which their parents will use during tax time to earn a child tax credit, or earned income credit purposes.

Jackson Hewitt Tax Preparer Lorraine Braun says depending upon the income it can mean a big chunk off taxable income.

But what you might not expect, someone using your child's social security number to illegally take advantage of the tax code.

But Braun says she has seen it happen.

“Five to eight years ago where a baby sitter claimed a couple of the kids she was baby sitting on her income tax. The parents file and their return gets rejected by the IRS because someone else has claimed their children as dependents,” says Braun.

The IRS says that activity is considered fraud.

It's just one way scammers can use your child's social security card to commit fraud.

Thieves gain access to your child's social security number and use that number with another name and birth date.

Because there is no history, a credit card, and credit score can be established.

Thousands, if not hundreds of thousands of dollars, can be racked up.

You and your child may not know it's happening until the child reaches college age and applies for loans or credit card and finds his credit is ruined.

Experts say keep your child's social security card secured, and if a school or other agency needs that information, ask them how they intend to keep it confidential.

If the answer doesn't sit well, don't give the number over.

The Federal Trade Commission estimates it handles about 18,000 identity theft complaints involving people 19 years and younger.

8% of those cases involve children.