The Trump administration has proposed a significant change to the annual tax filing process that would require most U.S. taxpayers to disclose their citizenship and work authorization status to the Internal Revenue Service (IRS). The revision, reflected in the draft 2026 Form 1040, includes a mandatory question asking whether the filer and their spouse are U.S. citizens, U.S. nationals, or aliens lawfully authorized to work in the country. A similar question appears on Schedule 3-A, a form used to claim refundable tax credits.

Administration officials argue that this measure is intended to prevent unauthorized immigrants from improperly claiming federal benefits such as the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC), potentially saving taxpayers up to $2 billion annually. According to the Treasury Department, the new data will be subject to privacy, disclosure, and other legal protections, though it did not clarify if the information would be shared with immigration enforcement agencies.

The proposal has sparked concern from taxpayer and privacy advocates who suspect the citizenship question may serve as an immigration enforcement tool. David Bier, director of immigration studies at the Cato Institute, said the move could pressure undocumented immigrants to either admit their unauthorized status on tax returns or risk committing a felony by providing false information. Nina Olson, executive director of the Center for Taxpayer Rights, criticized the shift, noting it entangles the IRS in immigration enforcement, complicating tax compliance for residents without lawful status.

Despite their status, many undocumented individuals do contribute to the tax system. A recent report from the National Taxpayer Advocate noted that about 3.8 million tax returns were filed in 2024 using Individual Tax Identification Numbers (ITINs), a system often used by those unable to obtain Social Security numbers. These returns generated over $14 billion in income taxes and $6.5 billion in Social Security and Medicare taxes. Since a valid Social Security number is required to qualify for credits like the EITC, the IRS currently cross-checks these numbers with the Social Security Administration. Critics argue this existing verification process makes the citizenship question redundant.

Under current law, immigrants without permanent legal status generally cannot claim refundable tax credits. However, some groups such as recipients of Deferred Action for Childhood Arrivals (DACA), temporary protected status holders, and certain temporary visa holders currently remain eligible. The administration’s proposal would align tax credit eligibility with restrictions outlined in the 1996 Personal Responsibility and Work Opportunity Reconciliation Act. Research by academics from Boston University, Columbia University, and the Institute on Taxation and Economic Policy estimates this change would cause approximately 1.8 million people, including over 800,000 children, to lose eligibility for the EITC and ACTC. Most affected children are U.S. citizens, passed ineligibility through their parents’ immigration status.

This initiative builds on previous efforts by the Trump administration to leverage IRS data for immigration enforcement. Last year, the Treasury Department agreed to provide confidential taxpayer information to U.S. Immigration and Customs Enforcement (ICE) to identify undocumented immigrants. A federal judge halted this data-sharing arrangement, ruling it violated taxpayer privacy laws, though before the injunction the IRS had shared addresses of approximately 47,000 individuals with ICE. The legal dispute continues, underscoring ongoing tension between tax administration and immigration policy enforcement.