Bessent files to stop illegals from getting IRS tax credits, and how it will work
By Easton Martin | August 20, 2026
The Trump administration is moving to prevent illegal immigrants and other non-qualified aliens from receiving refundable portions of several federal tax credits, with Treasury Secretary Scott Bessent arguing that taxpayer-funded benefits should be reserved for people legally eligible to receive them.
The Treasury Department and Internal Revenue Service proposed regulations Wednesday that would apply federal eligibility restrictions to four tax credits: the Earned Income Tax Credit, Child Tax Credit, American Opportunity Tax Credit and Adoption Tax Credit.
The proposed rules focus specifically on the refundable portion of the credits. That is the amount a taxpayer can receive as a payment when the credit exceeds the person’s federal income tax liability. Individuals who are not eligible under federal law could still use qualifying credits to reduce their tax liability, but would not receive the refundable portion.
Under the proposal, taxpayers would have to be U.S. citizens, U.S. nationals or qualified aliens when filing the return claiming the credit. The Treasury Department said the rules are intended to enforce provisions of the 1996 Personal Responsibility and Work Opportunity Reconciliation Act, which generally restricts federal public benefits to citizens, nationals and qualified aliens.
Bessent framed the move as part of President Trump’s broader effort to end taxpayer-funded benefits for people who are not legally entitled to receive them.
