Author: Julia Yong-hee Park
Previously, I discussed in detail how the EB-5 visa backlog for investors from mainland China would affect the timing of immigration for investors. The conclusion was that for the time being, as long as I-526 processing times stand at 14 months and the 2 year backlog doesn’t get longer, the investor can anticipate an additional 10 month waiting period.
So other than waiting a while longer for what is already a long process to begin with, the visa backlog doesn’t have a huge implication to most investors.
However, the situation is very different if you have a child that is near or over 18 years of age.
Most people know by now that once you have an immigration petition (I-526) pending your child’s age is frozen under the Child Status Protection Act (CSPA). That is why if the parent files an I-526 petition before the child turns 21, the child would still qualify for the greencard along with their parents even if the child is older than 21 when the I-526 is approved.
However, this might no longer be the case for families with older children. While many people immigrate to the United States with their families to start a new life, in many cases the whole point of EB-5 is for the investor’s children to obtain greencards and ultimately citizenship in the United States. I myself came to the United States as an adult with the full intention of going back to Korea after my law school studies. But ultimately we ended up staying in the United States for our three children. So I know from personal experience that immigration is often all about the kids.
The Child Status Protection Act (CSPA)
Prior to the enactment of the CSPA in 2002, if the child turned 21 at anytime before the parent received the actual greencard, they would no longer qualify to immigrate alongside the parents. This is called “aging-out”. Even back then, the processing times for immigration petitions (Step 1) and visa applications (Step 2) took a long time. While the wait times for EB-5 petitions were not long at all 13 years ago, the rules apply to all types of immigration including family based immigration. (Please read yesterday’s post for an explanation of Steps 1 and 2.)
So Congress stepped in and enacted the CSPA which protects a child from aging out due to long immigration processing times. However, for whatever reason (and my guess is that it was some sort of political compromise), the CSPA does NOT protect the child from delays resulting from visa backlogs. In other words, if it took a long time because the USCIS took too long to process the immigration petition in Step 1, the child is protected, but the child is not protected from aging out if you can’t move to Step 2 because the visa numbers are backlogged.
Examples of How the Backlog Affects Children
Then how does it actually work? Let’s use specific examples.
First, here is the basic set up:
Investor files I-526 in July 2015. Investor’s I-526 is approved 14 months later in September 2016. Waits 10 months and starts Consular Processing June 1, 2017.
When the I-526 is approved in September 2016, if the backlog is still 24 months, the cut-off date will be September 2014.
So the investor must now wait until the cut-off date on the Visa Bulletin reaches July 2015 (his Priority Date) before he can move to Step 2. And we know that if processing took 14 months, the investor can expect to wait 10 months until July 2017. (Again, please refer to yesterday’s post about what the Visa Bulletin/cut-off date is and where you can find it online.)
Now let’s say the investor had a child who is 20 years and 3 months old on July 2015 when the I-526 is filed.
Once the investor filed, the child’s age froze. But once he is approved when there are no visa numbers available, and the child starts aging again.
So in July 2017 when the investor can finally move to Step 2, the child is now 20 years and 3 month old + 10 months (since 10 months passed between the I-526 approval and the visa numbers becoming current). So the child is now 21 years and 1 month old and has aged out.
Now let’s assume instead of 20 years and 3 month at the time of I-526 filing, the child was 19 years and 6 months old.
So this time 19 years and 6 months + 10 months takes the child to 20 years and 4 months (under 21!) and the child will qualify for the EB-5 alongside the parents.
That is why now that visa backlog has become a reality, it is risky for the parent to become the main investor when the children are already 19 or 20 years old.
Currently as of the date of this article (April 16, 2015), with 14-month I-526 approval times and a 24 month backlog, as long as the child is 19 when the I-526 is filed, the child should qualify since the wait time is approximately 10 additional months. And if the child is 18, it looks pretty safe. So if you have already applied with an 18 year old child, no need to panic.
However, please be aware that the underlying assumptions can change (in other words, the I-526 approval time could get shorter or longer and the backlog of 24 months can get longer or shorter) which can skew the analysis. Let’s look at another example below.
Let’s say that the child is again19 years and 6 months old at the time of filing but the I-526 approval takes only 6 months (instead of 14 months).
So the I-526 is now approved in January 2016 instead of September 2016. This means the wait time between I-526 approval (Feb 2016) and visa number becoming current (July 2017) is 18 months instead of 10 months. So now the child is 19 years and 6 months + 18 months = 21 years and has aged out.
So in this example, even though the child was 19 years and 6 months old at filing like Example 1, ironically because the I-526s were approved more quickly, the child has aged out.
This is why the USCIS sometimes uses an extraordinary procedure called abeyance in other visa categories that are backlogged where they will take their time in approving the underlying immigration petition when it looks like the child will age out. But according to a question asked during a recent Stakeholder’s Call, the EB-5 team does not yet seem to be considering implementing abeyance.
This time let’s move the I-526 wait times back to 14 months but make the backlog 3 years instead of the current 2 years.
Here you can see that even though, again, the child was 19 years and 6 months at time of filing, because of the increased backlog, the child has aged out.
So as you can see, the outcome can differ widely when the underlying assumptions change. But the truth is that we don’t know how these assumptions will change in the future. For example, will the I-526 processing times become shorter? The USCIS currently only has 54 adjudicators processing I-526s. Will they finally hire more people as they have been promising for a while now? If so, when? Also, the current 24 month visa backlog is “expected” to increase to 36 months by the end of 2016; but it might happen sooner if the USCIS finally starts processing I-526s more quickly and more people move into Step 2 of the process. So while we can estimate, we can’t predict with accuracy.
So for now if you have already filed, with 14 month I-526 wait times and a 24 month backlog, if your child was under 20 when you filed, you are probably OK as long as the current assumption don’t change.
But if you are filing in the future, you will not want to rely on this post (written in April 2015) to make any decisions. You should definitely consult an attorney who understands what the current assumptions as well as projected changes would be.
Another option you should consider (and many investors are already doing this) is if the child is over 18 (legal age of contract) and the parents are pursuing EB-5 solely for the child, have the child become the main investor. Some people also choose this option as a form of tax planning when both parents have income. And, if the parents later decide that they want to live in the United States (to help take care of the grandkids!), 5 years after the child becomes a conditional greencard holder she can become a U.S. citizen and sponsor her parents. And as there is no visa quota for parents of U.S. citizens, the parents can easily get a greencard later. But I understand that this is not an easy decision for families that have more than one child as they will want both children to benefit from the EB-5 investment and making two separate petitions can be a big financial burden.
(A different but related question I often get is, can a child who is under 18 apply for EB-5 as the main investor? I plan to discuss this in a separate post later so please subscribe to our WeChat public account!)
I know this is a very confusing topic and I hope this post has demystified the process a bit. In my next post next week, I plan to discuss what ever happened to Obama’s Executive Action that was supposed to help us avoid all this!