The U.S. Department of the Treasury announced on Thursday (November 20th) a new regulation that will prevent undocumented immigrants from receiving four tax refund benefits, including Earned Income Tax Credit (EITC), Additional Child Tax Credit (ACTC), American Opportunity Tax Credit (AOTC), and Saver’s Match Credit starting from the 2026 fiscal year.
According to the announcement, the Treasury Department will soon issue a Notice of Proposed Rulemaking to clearly categorize these four tax refund benefits as “federal public benefits” under the 1996 Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA).
The law stipulates that undocumented immigrants and other ineligible foreign individuals will be unable to receive these taxpayer-funded tax refund benefits.
A legal opinion recently issued by the Office of Legal Counsel (OLC) of the Department of Justice supports this interpretation, and the Treasury Department’s new regulation will be based on this opinion.
Treasury Secretary Scott Bessent stated in a press release, “Under President Trump’s leadership, we are enforcing the law to prevent undocumented immigrants from claiming tax advantages that rightfully belong to American citizens.”
“We will continue to ensure that taxpayer resources are only used for those who are lawfully entitled to receive benefits,” he added.
According to a report from the U.S. media outlet Breitbart, researchers estimate that undocumented immigrants with Social Security numbers could receive $2.9 billion in cash subsidies through tax refunds, with $2 billion coming from EITC and about $890 million from ACTC.
Furthermore, researchers project that undocumented immigrants with Individual Taxpayer Identification Numbers could receive an additional $870 million to $1.6 billion in ACTC.
The Treasury Department plans to implement the new regulation starting from the 2026 fiscal year, putting an end to the aforementioned scenarios.