Treasury proposes barring certain noncitizens from refundable tax credits

The Treasury Department and IRS have proposed classifying refundable portions of four tax credits as federal public benefits, which could disqualify noncitizens with work authorization, including those with temporary protected status or DACA. The move targets alleged abuse of the tax refund system. Treasury Secretary Scott Bessent said the proposal ends benefits for those barred by law from receiving them.

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The proposed rule from the Treasury Department and IRS would reclassify the refundable portions of four specific tax credits as federal public benefits. This change would affect noncitizens who currently hold work authorization, including those under Temporary Protected Status (TPS) and Deferred Action for Childhood Arrivals (