On Nov. 20, the US Treasury Department said in a release that it will be issuing regulations on the treatment of certain refundable individual income tax credits under the Personal Responsibility and Work Opportunity Reconciliation Act of 1996. 

The Treasury will issue a notice of proposed rulemaking to make it clear that the refunded portions of certain individual income tax credits such as the Earned Income Tax Credit, the Additional Child Tax Credit, the American Opportunity Tax Credit, and the Saver’s Match Credit, are “federal public benefits” within the meaning of the act.

"Accordingly, illegal aliens and other non-qualified aliens would no longer be able to receive these benefits funded by the American taxpayer," the Treasury said. 

The Associated Press reported that, according to tax professionals, this rule change will likely impact children brought to the US illegally by their parents falling under the Deferred Action for Childhood Arrivals as well as those with Temporary Protected Status. Foreign workers and student visa holders as well as some families with children who are US citizens could also be affected. These impacts will depend on how the rule is written, the tax experts said.

According to The Associated Press, the Treasury Department’s statement was the "latest sign" of how the current administration has been taking a "whole of government" stance on immigration enforcement and looking to departments throughout the federal government to create ways to help carry out the Trump's administration's immigration plan. 

The Treasury release's said that The Department of Justice’s Office of Legal Counsel recently issued an opinion adopting this interpretation. Treasury intends to quickly issue a notice of proposed rulemaking accounting for the Department of Justice’s legal analysis. The Treasury's final regulations are expected to apply starting in tax year 2026.