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Investing.com -- The U.S. Department of the Treasury announced Thursday it will issue new regulations to prevent illegal immigrants from receiving certain refundable tax credits.
The forthcoming regulations will classify the refunded portions of several individual income tax credits as "federal public benefits" under the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA).
The affected tax credits include the Earned Income Tax Credit, Additional Child Tax Credit, American Opportunity Tax Credit, and Saver’s Match Credit. Under the new classification, illegal immigrants and other non-qualified aliens would no longer be eligible to receive these benefits.
"Under President Trump’s leadership we are enforcing the law and preventing illegal aliens from claiming tax benefits intended for American citizens," said Treasury Secretary Scott Bessent.
The Department of Justice’s Office of Legal Counsel recently issued an opinion supporting this interpretation of the law. The Treasury plans to issue a notice of proposed rulemaking that incorporates this legal analysis.
The final regulations are expected to take effect beginning in tax year 2026. The Treasury described the action as fulfilling President Trump’s commitment to enforce immigration laws and ensure taxpayer-funded benefits are provided only to those legally entitled to receive them.
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