The Treasury Department, led by Secretary Scott Bessent, has proposed tightening rules so refundable tax credits — including the EITC, child, adoption, and American Opportunity credits — are available only to U.S. citizens, nationals, and qualified aliens, a move officials say will protect taxpayers and reclaim roughly $3 billion from improper claims by people here unlawfully.
Many readers ask the obvious question: how were unlawful residents cashing in on refundable credits meant to support American families? The proposal aims to close that gap by requiring eligibility verifications and sworn statements on tax returns so refunds go only to those legally entitled to them.
Under @POTUS, the days of illegal aliens collecting taxpayer-funded benefits are over. The federal law is clear, and @USTreasury is enforcing it. American taxpayers should not be forced to foot the bill for benefits going to those who are barred by law from receiving them. These proposed regulations end the abuse, protect the integrity of the tax system, and put Americans first.
https://x.com/SecScottBessent/status/2090062335066898452
The change focuses on four refundable credits that can produce refunds even when no tax is owed: the earned income tax credit, child tax credit, adoption credit, and the American Opportunity tax credit. Treasury and the IRS say the shift will restrict refunds to U.S. citizens, U.S. nationals, and qualified aliens as defined under existing law.
Refundable credits were enacted to provide targeted assistance to low- and middle-income American households, not to people here illegally, Treasury officials argue. The proposed rules would require filers to declare under penalty of perjury that they meet eligibility requirements when claiming the refunded portion of a credit.
“Refundable tax credits, like the Earned Income Tax Credit (EITC), were enacted to help low-to-middle income American families and workers receive critical financial support,” said IRS Chief Executive Officer Frank J. Bisignano. “Today’s proposed regulations ensure that federally funded benefits are reserved for eligible taxpayers and protect the integrity of every taxpayer dollar.”
Under the proposal, a taxpayer must be a U.S. citizen, U.S. national, or qualified alien on the date the return is filed to claim the affected credit. Qualified aliens include lawful permanent residents, asylees, refugees, and certain other groups specified under the Personal Responsibility and Work Opportunity Reconciliation Act of 1996.
The rules also make clear that for joint returns only one spouse needs to meet the citizenship or qualified alien test to claim the refunded portion of a credit, and they add a perjury-like declaration to deter false claims. Treasury projects the change will affect about one million people currently able to claim those refundable benefits.
Conservatives and taxpayers who have watched illegal immigration strain public services are framing this move as common-sense stewardship of federal dollars. Ensuring that federally funded tax relief reaches lawful recipients fits a broader Republican priority of protecting taxpayer funds and enforcing immigration law.
Critics will argue about process, timing, and potential administrative burdens, and those debates will play out during the rulemaking comment period. Still, supporters say the proposal is a necessary correction to a program that has drifted from its original purpose and begun to reward the wrong people.
Changing how refundable tax credits are administered won’t solve every problem at the border, nor will it instantly reverse years of lax enforcement, but it removes an incentive that allowed abuses to flourish. The IRS and Treasury say this is a measured regulatory step to restore integrity while respecting statutory definitions of eligible aliens.
On the internet, a lot of people are asking the same practical question: if the law already barred benefits, why did the system let this happen? The administration answers that gaps in enforcement and verification created opportunities for abuse, and the proposed regulations close several of those loopholes.
Editor’s Note: Thanks to President Trump, illegal immigration into our great country has virtually stopped. Despite the radical left’s lies, new legislation wasn’t needed to secure our border, just a new president.
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