Children of immigrants wait to be picked up by their parents following "homework club" at a community center on April 3, 2025, in Connecticut.
Trump Treasury Would Strip Tax Refunds From Hundreds of Thousands of American Kids, Researchers Warn
Center on Budget and Policy Priorities experts said the move “would harm people who are immigrants and their families, including many US citizen children, who are critical to the nation’s future prosperity.”
Hundreds of thousands of US citizen children could lose access to key benefits as part of a Trump administration proposal to strip tax credit refunds away from immigrant families, including those with legal status.
In August, the US Treasury Department and Internal Revenue Service (IRS) proposed rules redefining four tax credits—the adoption tax credit, child tax credit (CTC), American opportunity tax credit, and earned income tax credit (EITC)—as "federal public benefits" under a decades-old welfare reform law, meaning that certain groups of noncitizens, not considered "qualified aliens," would be ineligible to claim refunds from them.
Among them are undocumented immigrants, but also many people with temporary nonimmigrant visas, as well as holders of Temporary Protected Status (TPS), and recipients of Deferred Action for Childhood Arrivals (DACA).
According to the Treasury and IRS, the average refunded benefit among all taxpayers whose claims contain at least one of the affected credits is $3,656.
Reporting on the proposal last month, CNBC described it as an effort to "use the nation’s financial safety net as a way to implement stricter immigration policy" and noted that low-income recipients, who are less likely to have large income tax bills to refund, would be hit the hardest.
In a policy brief published on Monday, a group of experts at the Center on Budget and Policy Priorities (CBPP)—director of federal tax policy Kris Cox, vice president for immigration policy Shelby Gonzales, deputy director of federal tax policy Samantha Jacoby, and senior research analyst Claire Zippel—examined the likely effects of the policy.
They estimated that the proposal would take away access to the refundable portion of the CTC and/or the EITC for 1 million people in affected families, including US citizens and people with lawful immigration statuses.
While the proposed rule estimates that between 200,000 and 700,000 taxpayers would become ineligible, the researchers said this understated the potential impact because it only included the tax filers themselves, without noting that their family members would also be hurt.
Using immigration status data from the Department of Homeland Security, the researchers said they determined that "the rule would take access to refundable credits away from hundreds of thousands of US citizen children if both parents—or their parent, for single-parent families—have an immigration status that is not a 'qualified' status."
"For 30 years, no administration, Democratic or Republican, has treated refundable tax credits this way," the researchers said. "The proposed rule includes a misguided reinterpretation of a 1996 law that created restrictive immigration-related eligibility standards for 'federal public benefits,' taking away access to basic needs programs from many immigrants with lawful statuses."
"The Trump administration is seeking to apply those same immigration-related restrictions—which require people to have a 'qualified' immigration status—to the refunded portion of certain tax credits," they continued. "This contradicts both the clear reading of the statutory text and congressional intent, which Congress has demonstrated by legislating on immigrant eligibility for tax credits several times since the 1996 law, most recently in 2025."
They noted that the new policy follows other efforts by the administration to restrict access to other programs for families with immigrants, including Head Start, child welfare services, and health services, all of which are being challenged in court.
Many of the people who'd be barred from receiving the credit refunds, the researchers said, are especially vulnerable, including:
- Children granted special immigrant juvenile status, who have been abused, abandoned, or neglected by one or both parents;
- Survivors of serious criminal activity who have cooperated with law enforcement;
- People with DACA and TPS; and
- Many others who are living and working lawfully in the United States.
"Taking away these tax credits would harm people who are immigrants and their families, including many US citizen children, who are critical to the nation’s future prosperity," the researchers said, pointing to studies linking additional income from tax credits with improved health, education, employment, and earnings."
"People who are immigrants and their families contribute to our communities and nation in immeasurable ways," they concluded. "These restrictions on tax credits create a higher effective tax rate for people who are filing their taxes solely based on their immigration status."
We are at a crossroads
This country and this world are at a monumental crossroads. US voters have an opportunity to beat back the forces of fascism and confront the billionaires who are rigging the economy, our media system, and our democracy, making it increasingly impossible for ordinary people to get by. We’re not just talking about the election. We’re talking about what must be done once these fascist elements are vanquished from power. We need a bolder set of solutions than what either major party has so far been willing to offer and a working-class movement ready to fight like hell for it. Trump didn't emerge from nowhere. The conditions that fueled MAGA authoritarianism were created by decades of radical neoliberal economic policies and a corrupt political system dominated by corporate interests. They slashed taxes on the super-rich, promising that the benefits would trickle down. They said giveaways to the corporate titans would make life more affordable for the rest of us. It was all bullshit. And when a bitter, betrayed populace searches for someone to blame, right-wing demagogues have little trouble finding scapegoats. People know when they're being lied to, but you won't hear any of this from the corporate media. Only independent journalism—powered and funded by people who believe in building a better world—can deliver truly trustworthy daily news. Our Fall Campaign is underway, and we need your help. To power our newsroom through the rest of the year, we need to raise $125,000 by midnight on October 31. So if you share our vision, please contribute whatever you can to sustain our work. |
Hundreds of thousands of US citizen children could lose access to key benefits as part of a Trump administration proposal to strip tax credit refunds away from immigrant families, including those with legal status.
In August, the US Treasury Department and Internal Revenue Service (IRS) proposed rules redefining four tax credits—the adoption tax credit, child tax credit (CTC), American opportunity tax credit, and earned income tax credit (EITC)—as "federal public benefits" under a decades-old welfare reform law, meaning that certain groups of noncitizens, not considered "qualified aliens," would be ineligible to claim refunds from them.
Among them are undocumented immigrants, but also many people with temporary nonimmigrant visas, as well as holders of Temporary Protected Status (TPS), and recipients of Deferred Action for Childhood Arrivals (DACA).
According to the Treasury and IRS, the average refunded benefit among all taxpayers whose claims contain at least one of the affected credits is $3,656.
Reporting on the proposal last month, CNBC described it as an effort to "use the nation’s financial safety net as a way to implement stricter immigration policy" and noted that low-income recipients, who are less likely to have large income tax bills to refund, would be hit the hardest.
In a policy brief published on Monday, a group of experts at the Center on Budget and Policy Priorities (CBPP)—director of federal tax policy Kris Cox, vice president for immigration policy Shelby Gonzales, deputy director of federal tax policy Samantha Jacoby, and senior research analyst Claire Zippel—examined the likely effects of the policy.
They estimated that the proposal would take away access to the refundable portion of the CTC and/or the EITC for 1 million people in affected families, including US citizens and people with lawful immigration statuses.
While the proposed rule estimates that between 200,000 and 700,000 taxpayers would become ineligible, the researchers said this understated the potential impact because it only included the tax filers themselves, without noting that their family members would also be hurt.
Using immigration status data from the Department of Homeland Security, the researchers said they determined that "the rule would take access to refundable credits away from hundreds of thousands of US citizen children if both parents—or their parent, for single-parent families—have an immigration status that is not a 'qualified' status."
"For 30 years, no administration, Democratic or Republican, has treated refundable tax credits this way," the researchers said. "The proposed rule includes a misguided reinterpretation of a 1996 law that created restrictive immigration-related eligibility standards for 'federal public benefits,' taking away access to basic needs programs from many immigrants with lawful statuses."
"The Trump administration is seeking to apply those same immigration-related restrictions—which require people to have a 'qualified' immigration status—to the refunded portion of certain tax credits," they continued. "This contradicts both the clear reading of the statutory text and congressional intent, which Congress has demonstrated by legislating on immigrant eligibility for tax credits several times since the 1996 law, most recently in 2025."
They noted that the new policy follows other efforts by the administration to restrict access to other programs for families with immigrants, including Head Start, child welfare services, and health services, all of which are being challenged in court.
Many of the people who'd be barred from receiving the credit refunds, the researchers said, are especially vulnerable, including:
- Children granted special immigrant juvenile status, who have been abused, abandoned, or neglected by one or both parents;
- Survivors of serious criminal activity who have cooperated with law enforcement;
- People with DACA and TPS; and
- Many others who are living and working lawfully in the United States.
"Taking away these tax credits would harm people who are immigrants and their families, including many US citizen children, who are critical to the nation’s future prosperity," the researchers said, pointing to studies linking additional income from tax credits with improved health, education, employment, and earnings."
"People who are immigrants and their families contribute to our communities and nation in immeasurable ways," they concluded. "These restrictions on tax credits create a higher effective tax rate for people who are filing their taxes solely based on their immigration status."
Hundreds of thousands of US citizen children could lose access to key benefits as part of a Trump administration proposal to strip tax credit refunds away from immigrant families, including those with legal status.
In August, the US Treasury Department and Internal Revenue Service (IRS) proposed rules redefining four tax credits—the adoption tax credit, child tax credit (CTC), American opportunity tax credit, and earned income tax credit (EITC)—as "federal public benefits" under a decades-old welfare reform law, meaning that certain groups of noncitizens, not considered "qualified aliens," would be ineligible to claim refunds from them.
Among them are undocumented immigrants, but also many people with temporary nonimmigrant visas, as well as holders of Temporary Protected Status (TPS), and recipients of Deferred Action for Childhood Arrivals (DACA).
According to the Treasury and IRS, the average refunded benefit among all taxpayers whose claims contain at least one of the affected credits is $3,656.
Reporting on the proposal last month, CNBC described it as an effort to "use the nation’s financial safety net as a way to implement stricter immigration policy" and noted that low-income recipients, who are less likely to have large income tax bills to refund, would be hit the hardest.
In a policy brief published on Monday, a group of experts at the Center on Budget and Policy Priorities (CBPP)—director of federal tax policy Kris Cox, vice president for immigration policy Shelby Gonzales, deputy director of federal tax policy Samantha Jacoby, and senior research analyst Claire Zippel—examined the likely effects of the policy.
They estimated that the proposal would take away access to the refundable portion of the CTC and/or the EITC for 1 million people in affected families, including US citizens and people with lawful immigration statuses.
While the proposed rule estimates that between 200,000 and 700,000 taxpayers would become ineligible, the researchers said this understated the potential impact because it only included the tax filers themselves, without noting that their family members would also be hurt.
Using immigration status data from the Department of Homeland Security, the researchers said they determined that "the rule would take access to refundable credits away from hundreds of thousands of US citizen children if both parents—or their parent, for single-parent families—have an immigration status that is not a 'qualified' status."
"For 30 years, no administration, Democratic or Republican, has treated refundable tax credits this way," the researchers said. "The proposed rule includes a misguided reinterpretation of a 1996 law that created restrictive immigration-related eligibility standards for 'federal public benefits,' taking away access to basic needs programs from many immigrants with lawful statuses."
"The Trump administration is seeking to apply those same immigration-related restrictions—which require people to have a 'qualified' immigration status—to the refunded portion of certain tax credits," they continued. "This contradicts both the clear reading of the statutory text and congressional intent, which Congress has demonstrated by legislating on immigrant eligibility for tax credits several times since the 1996 law, most recently in 2025."
They noted that the new policy follows other efforts by the administration to restrict access to other programs for families with immigrants, including Head Start, child welfare services, and health services, all of which are being challenged in court.
Many of the people who'd be barred from receiving the credit refunds, the researchers said, are especially vulnerable, including:
- Children granted special immigrant juvenile status, who have been abused, abandoned, or neglected by one or both parents;
- Survivors of serious criminal activity who have cooperated with law enforcement;
- People with DACA and TPS; and
- Many others who are living and working lawfully in the United States.
"Taking away these tax credits would harm people who are immigrants and their families, including many US citizen children, who are critical to the nation’s future prosperity," the researchers said, pointing to studies linking additional income from tax credits with improved health, education, employment, and earnings."
"People who are immigrants and their families contribute to our communities and nation in immeasurable ways," they concluded. "These restrictions on tax credits create a higher effective tax rate for people who are filing their taxes solely based on their immigration status."