The Trump administration has proposed requiring every American taxpayer to disclose their citizenship and work authorization status directly to the IRS, marking a significant expansion of information collected on annual tax returns that could affect more than 1.7 million people currently receiving federal tax credits.

New Requirements On Tax Forms

The IRS released a draft 1040 form in late August that includes a mandatory question asking whether filers and their spouses are U.S. citizens, U.S. nationals, or aliens lawfully authorized to work in the country. Taxpayers must certify their status under penalty of law to file their returns. A companion form used to claim refundable tax credits features identical language, creating a new hurdle for families seeking the Earned Income Tax Credit and Additional Child Tax Credit.

The Treasury Department claims this measure will prevent illegal immigrants from accessing federal benefits they cannot legally receive, projecting savings of up to $2 billion for taxpayers. Officials stated the collected information will receive privacy protections but declined to confirm whether data would be shared with immigration enforcement agencies for arrest and deportation purposes.

Who Loses Benefits Under The Plan

While the administration frames this as targeting illegal immigrants, legal residents would lose benefits too. People covered under Deferred Action for Childhood Arrivals, those with temporary protected status, and workers holding H1-B visas would become ineligible for certain refundable credits under the proposed restrictions. Research published this week estimates 671,000 people, including 309,000 children, would lose the Earned Income Tax Credit. Another 1.1 million people, including 574,000 children, would lose additional benefits.

Current law already requires valid Social Security numbers for the Earned Income Tax Credit, and the IRS verifies each claim against Social Security Administration records. Workers using Individual Tax Identification Numbers cannot claim this credit now. The Trump administration wants to apply stricter eligibility standards from the Personal Responsibility and Work Opportunity Reconciliation Act to refundable tax credits.

The Tax Contribution Question

Data from 2024 shows taxpayers filing with Individual Tax Identification Numbers submitted 3.8 million returns, paying $14.4 billion in income taxes and $6.5 billion in Social Security and Medicare taxes. These workers, often undocumented immigrants who cannot obtain Social Security numbers, contribute substantially to federal revenue while remaining ineligible for most benefits. They typically cannot collect Social Security benefits unless they later gain legal status under federal law, creating a one-way payment system into programs they cannot access.