WASHINGTON – A new โTrump governance regulation set to take effect in โคtaxโ year 2026 is drawing criticism for potentially denying tax credits to immigrant families, even those authorized to work in the United States. โขThe rule stems fromโ aโฃ Justice Department reinterpretation of existing law, allowing the Treasury Department to enforce โฃrestrictions on taxโข benefits โขfor individuals without legal โstatus.
Critics โargue the changeโ targets immigrants and complicates โฃthe tax process for those legally working and paying taxes. According to the Institute โขonโ Taxation and โeconomic โฃPolicy, โคindividuals already lacking work authorization are ineligible for these refundable taxโฃ credits, meaningโ the regulationโ will primarily impact those โ with authorization.
“It’sโข a terrible โand unfair idea to denyโข tax credits to peopleโ who have paidโ taxes and areโฃ eligible for them as โคof their โimmigration โstatus,” said Daniel Costa,director of Immigration Law and Policy โขResearch โatโ the Economic Policy Institute.”Implementing this will require determining who has status and who doesn’t, whichโ isโค another way โthat the Trump administration will expand its deportation dragnet.”
Treasury Secretaryโ Scottโ Bessent stated the regulation is intended to “enforce the law and prevent illegalโข aliens from claiming tax benefits intended for American citizens.”
Though, experts likeโ Carlโค Davis, research director of the Institute on Taxation and โฃEconomic Policy, believe the administration โคis deliberately creating obstacles for taxpaying immigrants. NYU Tax Lawโค Centerโ Policy Director Brandon DeBotโฃ argued the Treasury’s reinterpretation “overrides suchโข clear provisions of โthe tax code,” and that Congressional action wouldโ be required to enact such โa change.Davis added โฃthat the move likely bypassed Congress โdue to a lack ofโ broad public support, especially for targeting Dreamers and DACA recipients.
Undocumented immigrants contributedโ $100โ billion โขinโ federal,state,and local taxes in 2022,and contribute billions toโฃ federal payrollโ taxes despite being ineligible for โSocial Security retirement โขbenefits โขor Medicare.