Treasury, IRS move to restrict refundable tax credits to certain immigrants
The move would likely impact hundreds of thousands of immigrants who have Social Security numbers and have received authorization to work in the U.S., experts said.
TL;DR
- Treasury and IRS propose new rules to restrict access to refundable tax credits for certain immigrants.
- The move could disqualify hundreds of thousands or millions of immigrants, particularly lower earners.
- Refundable tax credits, including the child tax credit and earned income tax credit, would be classified as 'federal public benefits'.
- Immigrants with pending asylum, Temporary Protected Status, or DACA recipients could be affected.
- Treasury Secretary Scott Bessent stated the rules aim to 'protect the integrity of the tax system, and put Americans first'.
- Experts estimate up to 'several million people' could be impacted.
- This proposal is part of a broader effort by the administration to restrict immigrants' access to public benefits.
- The nonrefundable portion of these tax credits would still be claimable, reducing tax liability to zero but not generating refunds.
- Lower-income households would be most impacted as they rely more on refunds.
- A 45-day public comment period is open, with a hearing scheduled for October 14.
- Final regulations, if implemented this year, would apply to tax years ending on or after the publication date, affecting 2026 tax returns.