Archive · 19 Aug 2026
US proposes tighter rules for four refundable tax credits
The US government wants to change who can receive extra money from four tax credits.
These credits include help for workers, families with children, students and adoptive parents.
The change would affect only the part of a credit that is paid back after a person’s tax bill reaches zero.
To receive that refunded money, a person would need to be a US citizen, US national or qualified alien.
Qualified aliens can include lawful permanent residents, asylees and refugees.
On their tax return, taxpayers would have to promise that they qualify.
For married couples filing together, only one spouse would need to meet the status requirement.
The proposal is not a final rule yet, and the government will accept public comments first.
Proposed rules would restrict the refunded portions of four federal tax credits for some immigrants.
Eligible taxpayers would need to be US citizens, US nationals or qualified aliens when filing.
The affected credits are the EITC, Child Tax Credit, American Opportunity Tax Credit and Adoption Tax Credit.
Taxpayers would have to confirm eligibility under penalty of perjury on their federal tax returns.
The rules are not final and would apply only after final regulations are published.
- Who
- The US Treasury Department and Internal Revenue Service proposed the rules; affected taxpayers include people claiming four refundable tax credits.
- What
- The proposal would limit access to the refunded portions of the Earned Income Tax Credit, Child Tax Credit, American Opportunity Tax Credit and Adoption Tax Credit.
- When
- The rules are proposed and would apply to tax years ending on or after the date final regulations are published.
- Where
- The changes concern federal income tax returns in the United States.
- Why
- The Treasury and IRS say the proposal clarifies and enforces the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, which they interpret as limiting federal public benefits to eligible immigration-status groups.
- Affected credits
- Earned Income Tax Credit, Child Tax Credit, American Opportunity Tax Credit and Adoption Tax Credit
- Affected amount
- The refunded portion exceeding the taxpayer’s federal income tax liability for the year
- Eligible statuses
- US citizens, US nationals and qualified aliens
- Examples of qualified aliens
- Lawful permanent residents, asylees, refugees and certain other groups defined under federal law
- Joint returns
- Only one spouse would need to meet the citizenship, nationality or qualified-alien requirement
- Taxpayer declaration
- Eligibility would have to be affirmed under penalty of perjury
- Status of proposal
- The regulations are not final; Treasury and the IRS will seek public comments and hearing requests
- Legal basis
- The proposal relies on the Personal Responsibility and Work Opportunity Reconciliation Act of 1996