A new Trump proposal would require tax filers to disclose citizenship status to the IRS

NEW YORK (AP) — The Trump administration would require U.S. taxpayers to disclose their citizenship and work authorization status to the IRS as part of a proposed change to the annual tax form that nearly all workers file each year.

Administration officials argue the new requirement will help the federal government crack down on illegal immigrants collecting federal benefits they are not eligible for, potentially saving taxpayers up to $2 billion. But taxpayer and privacy advocates say the data could be used to help find and deport illegal immigrants.

“It could be used as an immigration enforcement tool and that is probably the reason why they are doing this,” said David Bier, director of immigration studies at the libertarian-leaning Cato Institute.

Most Americans will see it as a new checkbox that gives the government even more information on taxpayers. But those living in the country illegally face a more complicated choice: Declare on a tax return that they are not authorized to live in the U.S. or lie on the return, which is a felony. Some may stop filing their taxes altogether.

“It’s dragging the IRS into this administration’s immigration policies,” said Nina Olson, executive director for the Center for Taxpayer Rights.

The IRS posted its draft 1040 form for 2026 in late August. It includes the question, “At the time you file your return, are you, and your spouse if filing jointly, a U.S. citizen, U.S. national, or an alien lawfully authorized to work in the U.S.?" There are “Yes” or “No" checkboxes for both the filer and their spouse. A draft of a second form, known as Schedule 3-A used to claim refundable tax credits, asks a similar question.

The questions are not optional. Every tax filer must certify under penalty of law their immigration or citizenship status to the IRS to file their return.

The Treasury Department says the new question is meant to keep illegal immigrants from taking advantage of refundable tax credits, such as the Earned Income Tax Credit or the Additional Child Tax Credit. These are credits for which low- and middle income workers and families may qualify that often result in a refund back to the taxpayer.

In a statement, a Treasury Department official said the information will be “subject to a variety of privacy, disclosure and other legal protections.” The statement did not say whether the information will be shared with immigration enforcement agencies.

Despite not being authorized to live and work in the U.S., illegal immigrants do pay taxes. A 2024 report by the National Taxpayer Advocate found 3.8 million tax returns where a taxpayer used an Individual Tax Identification Number, or ITIN. While an ITIN can be issued for a variety of purposes, undocumented workers who cannot obtain a Social Security number are among those who use them.

IRS data show that taxpayers who filed those nearly 4 million returns paid $14.4 billion in income taxes and $6.5 billion in Social Security and Medicare taxes.

A valid Social Security Number, not an ITIN, is required to qualify for the Earned Income Tax Credit. The IRS checks Social Security Numbers against Social Security Administration records for each claim of the EITC.

Because of this process, Olson said she believes the new proposal is unnecessary.

“Your citizenship or residency status is not information the IRS needs to process a return. It’s not even information the IRS needs to process these tax credits,” she said. “The IRS already has Social Security data on taxpayers, as well as ITIN information. It already has what it needs to process a return.”

Immigrants lacking permanent legal status are generally not eligible for federal benefits after Congress overhauled federal welfare programs in the mid-1990s. A tax filer needs to be a U.S. citizen or a green card holder to claim the EITC or CTC, with some limited exceptions.

But some immigrants in the U.S. who presently qualify for some of these credits would not under the new policy. This would include people covered under the Obama-era Deferred Action for Childhood Arrivals, those with temporary protected status and temporary workers in the country under H1-B visas.

The Trump administration argues in its proposal that the Personal Responsibility and Work Opportunity Reconciliation Act, the law that governs who is eligible for benefit programs, should be applied to refundable tax credits as well. The research paper published this week estimates that 671,000 people, including 309,000 children, will lose the Earned Income Tax Credit under this policy. Another roughly 1.1 million people, including 574,000 children, will lose the Additional Child Tax Credit.

Most of the children that would lose eligibility to these credits are U.S. citizens, according to these researchers at Boston University, Columbia University and the Institute on Taxation and Economic Policy, because one or more of their parents’ citizenship or immigration status.

The Trump administration has tried to use the IRS to implement its immigration policies before. Last year, the Treasury Department agreed to share confidential taxpayer information of immigrants with U.S. Immigration and Customs Enforcement for the purpose of identifying and deporting people illegally in the country.

The data-sharing agreement was halted by a federal judge, which found that it violated federal taxpayer privacy laws, and the halt remains in effect as the case works its way through the courts. However, before it was stopped, it was found that the IRS had already turned over the addresses of 47,000 people to ICE.