The Trump administration is proposing a change to the annual federal tax form that would require taxpayers to disclose their citizenship and work authorization status to the IRS, according to AP News. Nearly all U.S. workers file the form each year.

Administration officials say the added information would help block immigrants without permanent legal status from receiving federal benefits they aren’t entitled to, potentially saving taxpayers as much as $2 billion. Taxpayer and privacy advocates counter that the data could be used to locate and deport those individuals.

David Bier, director of immigration studies at the libertarian-leaning Cato Institute, said the requirement could serve as an immigration enforcement tool and that this is likely the real motivation behind it.   

The proposed 1040 would require taxpayers to state their citizenship or work authorization 

For most Americans, the change will look like one more checkbox that hands the government additional information about them. For people living in the country illegally, the choice is harder: disclose on a tax return that they aren’t authorized to be in the U.S., or give a false answer, which is a felony. Some may stop filing altogether. Nina Olson, executive director of the Center for Taxpayer Rights, said the move pulls the IRS into the administration’s immigration policies.

The IRS posted its draft 2026 Form 1040 in late August. It asks filers and spouses, if filing jointly, whether they are a U.S. citizen, a U.S. national, or an alien lawfully authorized to work in the U.S., with “Yes” and “No” checkboxes for each person. A draft of Schedule 3-A, used to claim refundable tax credits, includes a similar question.

The question is mandatory. Every filer must certify their citizenship or immigration status to the IRS, under penalty of law, in order to file.

The Treasury Department says the goal is to stop immigrants without permanent legal status from claiming refundable credits such as the Earned Income Tax Credit and the Additional Child Tax Credit. These credits go to low- and middle-income workers and families and often result in a refund to the taxpayer.

A Treasury official said in a statement that the information will be subject to privacy, disclosure and other legal protections but did not say whether it will be shared with immigration enforcement agencies.    

Immigrants without permanent legal status still pay billions in taxes 

Immigrants who lack permanent legal status and aren’t authorized to live and work in the U.S. nonetheless pay taxes. A 2024 report from the National Taxpayer Advocate identified 3.8 million returns filed with an Individual Taxpayer Identification Number, or ITIN. ITINs are issued for a range of purposes, but they are commonly used by undocumented workers who can’t get a Social Security number.

According to IRS data, the filers of those nearly 4 million returns paid $14.4 billion in income taxes and $6.5 billion in Social Security and Medicare taxes.

An ITIN doesn’t qualify a filer for the Earned Income Tax Credit. A valid Social Security number is required, and the IRS checks the number against Social Security Administration records for every EITC claim.

That verification is why Olson considers the new proposal unnecessary. She said the IRS doesn’t need a person’s citizenship or residency status to process a return or these credits, since it already holds Social Security and ITIN data on taxpayers and has what it needs to do the job.

Federal benefits have been largely off limits to immigrants without permanent legal status since Congress overhauled welfare programs in the mid-1990s. To claim the EITC or the Child Tax Credit, a filer generally must be a U.S. citizen or green card holder, with a few limited exceptions.   

The new policy, if enacted, would cut off tax credits for some immigrants who currently qualify 

Under the new policy, some immigrants who now qualify for certain refundable credits would lose eligibility. That includes people covered by the Obama-era Deferred Action for Childhood Arrivals program, those with temporary protected status, and temporary workers in the country on H-1B visas.

In its proposal, the Trump administration argues that the Personal Responsibility and Work Opportunity Reconciliation Act, the law governing eligibility for benefit programs, should also apply to refundable tax credits. A research paper published this week estimates that 671,000 people, including 309,000 children, would lose the Earned Income Tax Credit. Roughly 1.1 million more people, including 574,000 children, would lose the Additional Child Tax Credit.

The researchers, from Boston University, Columbia University, and the Institute on Taxation and Economic Policy, found that most of the affected children are U.S. citizens who would lose eligibility because of a parent’s citizenship or immigration status. 

This isn’t the first time the administration has tried to use the IRS to carry out its immigration policies. Last year, the Treasury Department agreed to share confidential taxpayer information on immigrants with U.S. Immigration and Customs Enforcement to help identify and deport people.

A federal judge halted the agreement, finding that it violated federal taxpayer privacy laws. The halt remains in effect while the case moves through the courts. Before it was stopped, however, the IRS had already given ICE the addresses of 47,000 people.