Treasury announced it will issue regulations clarifying that certain refundable individual income tax credits—including the Earned Income Tax Credit, Additional Child Tax Credit, American Opportunity Tax Credit, and Saver’s Match Credit—are federal public benefits under the Personal Responsibility and Work Opportunity Reconciliation Act of 1996. The forthcoming notice of proposed rulemaking will state that illegal aliens and other non‑qualified aliens cannot receive these benefits funded by taxpayers. The Treasury’s Office of Tax Policy and the Internal Revenue Service have worked to advance this initiative, according to Secretary Scott Bessent. The Department of Justice’s Office of Legal Counsel recently issued an opinion supporting this interpretation. Treasury plans to issue the proposed rulemaking soon, with final regulations expected to apply beginning tax year 2026.
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https://home.treasury.gov/news/press-releases/sb0321
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