Treasury and IRS Propose Rules to Restrict Refundable Tax Credits for Certain Immigrants
The U.S. Treasury Department and Internal Revenue Service (IRS) have proposed new rules that would limit access to refundable tax credits for certain immigrant groups, including those with Temporary Protected Status (TPS), Deferred Action for Childhood Arrivals (DACA), or pending asylum applications. The affected credits include the adoption credit, child tax credit, American Opportunity tax credit, and earned income tax credit. These changes could impact millions of individuals who currently receive these benefits. The move is part of a broader strategy by the Trump administration to use federal programs as tools for enforcing stricter immigration policies. Tax experts estimate that up to several million people may be affected, particularly lower-income earners with valid work authorization but no citizenship status. The proposed rules define refundable tax credits as 'federal public benefits,' which would disqualify many noncitizens from claiming them. The changes come amid a larger effort by the administration and Republican lawmakers to restrict immigrants' access to various federal programs, including Medicaid and Affordable Care Act subsidies.
