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Proposed IRS changes put tax credits and immigration status under fresh scrutiny. (img: Pinterest)
Washington DC: The Trump administration is moving towards a significant change in the US federal tax filing process, with a proposal that would require taxpayers to disclose their citizenship or work-authorisation status while filing annual income tax returns.
The proposed change is reflected in the draft 2026 Form 1040 issued by the Internal Revenue Service (IRS). Under the draft, taxpayers, as well as spouses filing jointly, would be asked to confirm whether they are US citizens, US nationals or foreign nationals legally authorised to work in the country.
The question would not merely be informational. Taxpayers would have to certify their status under penalty of law as part of filing their returns. A similar requirement has also been included in the draft Schedule 3-A, which relates to certain refundable tax credits.
The Treasury Department has said the measure is intended to prevent people who are not eligible from claiming refundable federal tax credits, particularly the Earned Income Tax Credit (EITC) and Additional Child Tax Credit.
Administration officials argue that existing federal restrictions on access to certain public benefits should also be applied to these refundable tax credits. The government has estimated that tightening eligibility could prevent billions of dollars in payments that it considers improper.
The proposal comes against the backdrop of the Trump administration's broader efforts to link immigration enforcement with federal administrative systems.
The proposed requirement could have consequences for some categories of non-citizens who currently qualify for particular tax credits. According to reporting on research examining the potential impact, approximately 671,000 people, including about 309,000 children, could lose access to the EITC.
A further estimated 1.1 million people, including around 574,000 children, could become ineligible for the Additional Child Tax Credit. The groups potentially affected include certain people covered by Deferred Action for Childhood Arrivals (DACA), individuals with Temporary Protected Status and some temporary workers, including H-1B visa holders, depending on the final eligibility rules.
Researchers have also noted that many children who could be affected are themselves US citizens, despite having parents whose immigration status could influence eligibility for the credits.
The proposed disclosure requirement has also renewed attention on the fact that undocumented immigrants contribute to the US tax system. The National Taxpayer Advocate reported that around 3.8 million tax returns in 2024 involved taxpayers using Individual Taxpayer Identification Numbers, or ITINs. Such numbers are used by individuals who cannot obtain Social Security numbers, including some undocumented workers.
According to data cited in recent reporting, taxpayers filing through those returns paid billions of dollars in federal income, Social Security and Medicare taxes.
At present, the IRS already uses Social Security Administration records to verify Social Security numbers when processing claims for the Earned Income Tax Credit. Individuals filing solely with an ITIN cannot claim the EITC because a valid Social Security number is required for the credit.
The proposal has prompted concern among taxpayer advocates and immigration-policy experts over whether information supplied to the IRS could eventually be used for immigration enforcement.
The Treasury Department has said information collected through the new requirement would remain subject to privacy, disclosure and other legal protections. However, officials have not publicly clarified whether the information could be shared with immigration-enforcement agencies.
Critics argue that requiring taxpayers to disclose immigration-related information could discourage some undocumented workers from filing returns. They also contend that bringing the IRS more directly into immigration-related screening could alter the traditional role of the tax agency.
The issue is particularly sensitive given previous disputes over attempts to share taxpayer information with immigration authorities. Earlier efforts by the administration to facilitate such data sharing have faced legal challenges.
The citizenship and work-authorisation question currently appears in a *draft* of the 2026 Form 1040 and is therefore not necessarily the final version taxpayers will use.
Draft IRS forms typically undergo further review and approval before being finalised. Bloomberg Tax reported that the draft form is subject to approval by the Office of Management and Budget and could undergo additional changes.
If adopted, however, the measure would mark a notable expansion in the information taxpayers are asked to provide on their annual federal returns, while potentially changing eligibility for certain refundable tax credits for some non-citizens.
