Trump proposal could force tax filers to reveal immigration status to IRS

Key Points:

• The Trump administration has proposed requiring U.S. taxpayers to disclose their citizenship and work authorization status on the annual IRS tax form, aiming to prevent illegal migrants from claiming federal benefits they are ineligible for, potentially saving taxpayers up to $2 billion.
• The draft 2026 Form 1040 includes a question on citizenship and work authorization status, and filers must certify this information under penalty of law; similar questions appear on Schedule 3-A, which is used for refundable tax credits.
• The proposal would restrict eligibility for refundable tax credits like the Earned Income Tax Credit (EITC) and Additional Child Tax Credit (ACTC) by applying standards from the Personal Responsibility and Work Opportunity Reconciliation Act, potentially disqualifying some migrants currently eligible under programs like DACA and Temporary Protected Status.
• Research estimates that 671,000 people, including 309,000 children, would lose the EITC, and 1.1 million people, including 574,000 children, would lose the ACTC, with many affected children being U.S. citizens due to their parents' immigration status.
• Critics argue the new requirement could turn the IRS into an immigration enforcement tool, forcing undocumented taxpayers to risk arrest by disclosing their status or commit tax fraud by lying, potentially leading some to stop filing taxes altogether.