IRS Drafts 1040 Question on Legal Status to Limit Refundable Tax Credits
Updated
Updated · POLITICO · Sep 21
IRS Drafts 1040 Question on Legal Status to Limit Refundable Tax Credits
3 articles · Updated · POLITICO · Sep 21
Summary
A draft IRS income tax form for the next filing season asks taxpayers whether they are legally in the United States, adding an immigration-status question to the 1040.
The agency told Tax Notes the question is meant to ensure only taxpayers "legally eligible" receive refundable credits, aligning with the Trump administration’s broader immigration enforcement push.
The move follows court blocks on the IRS’s data-sharing agreement with immigration authorities and Treasury efforts to curb immigrants’ access to refundable benefits such as the Earned Income Tax Credit.
Critics, including former IRS Commissioner John Koskinen, said the change could deter undocumented immigrants from filing at all, reducing tax compliance and pushing more taxpayers underground despite immigrants paying billions in taxes annually.