The Trump administration proposed new regulations that block illegal immigrants from receiving refundable individual income tax credits. The proposed rule affects the child, adoption, earned income, and American opportunity tax credits.
According to the rule, those who may receive the refunded portion of a credit must be a U.S. citizen, national, or qualified immigrant specified on the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA), and declare on the tax return that they are eligible to receive the refund. For a joint return, only one spouse must meet the eligibility criterion.
“Under President Trump, the days of illegal aliens collecting taxpayer-funded benefits are over. The federal law is clear, and Treasury is enforcing it,” Treasury Secretary Scott Bessent said in a statement. “American taxpayers should not be forced to foot the bill for benefits going to those who are barred by law from receiving them. These proposed regulations end the abuse, protect the integrity of the tax system, and put Americans first.”
“Refundable tax credits, like the Earned Income Tax Credit (EITC), were enacted to help low-to-middle income American families and workers receive critical financial support,” said IRS Chief Executive Officer Frank Bisignano. “Today’s proposed regulations ensure that federally funded benefits are reserved for eligible taxpayers and protect the integrity of every taxpayer dollar.”
A recent report found that the IRS paid out $213 million in Earned Income Tax Credits to roughly 67,000 tax filers using nonwork Social Security numbers, money the agency’s own inspector general says should never have gone out. The findings, reported by The Washington Times, cover tax years 2023 and 2024. Nonwork Social Security numbers are issued to foreign nationals, including international students, who need the numbers to access government services or benefits but are legally barred from holding jobs in the United States. The EITC is a refundable tax credit specifically designed for the working poor.
