Treasury To Block Tax Credits For Illegal Immigrants Under New Trump Administration Rule

The Treasury Department plans to issue regulations barring illegal immigrants and certain foreign nationals from receiving a range of refundable tax credits, a move the Trump administration says is necessary to ensure federal benefits are limited to those eligible under longstanding law.

Treasury Secretary Scott Bessent said Thursday that the department will implement new rules defining who may claim income tax credits covered by the 1996 Personal Responsibility and Work Opportunity Reconciliation Act, or PRWORA. The law restricts access to federal public benefits for individuals who are not U.S. citizens or qualifying residents.

“Under President Trump’s leadership, we are enforcing the law and preventing illegal aliens from claiming tax benefits intended for American citizens,” Bessent told Breitbart. 

The regulation will specify that the refundable portions of the Earned Income Tax Credit, the Additional Child Tax Credit, the American Opportunity Tax Credit and the Saver’s Match Credit constitute federal public benefits. As a result, the Treasury Department said, illegal immigrants and other foreign nationals will not be eligible to receive them.

“Treasury’s Office of Tax Policy and the Internal Revenue Service have worked tirelessly to advance this initiative and ensure its successful implementation,” Bessent said. “Their diligence and professionalism reflect this administration’s determination to uphold the integrity of our tax system. We will continue to ensure that taxpayer resources are directed only to those who are entitled under the law.”

The rule follows a recent opinion from the Office of Legal Counsel at the Justice Department, interpreting these income tax credits as federal public benefits that fall under PRWORA’s eligibility restrictions.

Research has indicated that illegal immigrants receive substantial refundable tax credits each year. A 2021 report from the Center for Immigration Studies estimated that illegal immigrants with Social Security numbers receive roughly $2.9 billion in cash payments annually, including $2 billion from the Earned Income Tax Credit and $890 million from the Additional Child Tax Credit. The report also estimated that illegal immigrants filing with Individual Taxpayer Identification Numbers receive between $870 million and $1.6 billion in Additional Child Tax Credit payments.

The Treasury Department said the new regulations will apply beginning with the 2026 tax year. (h/t Capital.news)