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What the draft Form 1040 asks
In an October 1, 2026 report, the Associated Press described a draft 2026 Form 1040 with this question: “At the time you file your return, are you, and your spouse if filing jointly, a U.S. citizen, U.S. national, or an alien lawfully authorized to work in the U.S.?” The draft provides Yes/No boxes for the filer and spouse. AP described the questions as mandatory in the draft.
This is draft wording, not a confirmed instruction for the final 2026 return. As of October 3, 2026, the final form wording and whether the question will remain mandatory have not been settled in the sources reviewed. The question asks about citizenship, nationality, or work authorization; it should not be read as a final determination of eligibility for any tax credit.
How the draft question differs from the proposed credit rules
Treasury and the IRS have separately proposed regulations applying the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) to specified refundable tax credits. The draft Form 1040 seeks a status answer. The proposed regulations would require a declaration of eligibility for the refunded portion of certain credits. One does not establish the other.
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| Policy instrument | What it would do | Status as of October 3, 2026 |
|---|---|---|
| Draft 2026 Form 1040 | As described by AP, asks whether the filer and, on a joint return, the spouse are citizens, nationals, or lawfully authorized to work in the United States. | Draft form; final wording and instructions are not settled. |
| Proposed Treasury and IRS regulations | Would require an eligibility declaration for the refunded portion of four specified credits, under PRWORA’s public-benefit rules. | Proposed regulations; not a final rule. |
The draft’s phrase “lawfully authorized to work” is not interchangeable with PRWORA’s statutory “qualified alien” categories. A work authorization, visa label, or answer to the draft form question alone does not establish whether someone qualifies under the proposed credit rules.
Which credits could be affected—and which part of them
The proposed regulations cover four credits: the adoption tax credit, child tax credit (CTC), American opportunity tax credit (AOTC), and earned income tax credit (EITC). They treat only the refunded portion as a federal public benefit: the aggregate amount of the affected refundable credits that exceeds the taxpayer’s applicable income-tax liability.
Under the proposal, a taxpayer who is otherwise entitled to a credit could still claim an amount that offsets income-tax liability even if the taxpayer is not eligible for the refunded portion. The proposal would require an eligibility declaration under penalty of perjury. For a joint return, the IRS summary says one spouse must be a U.S. citizen, U.S. national, or qualified alien.
The IRS describes qualified aliens as including lawful permanent residents, asylees, refugees, and certain other categories defined by law. This is not a green-card-only test, and eligibility cannot be determined from a broad immigration label alone. Individual circumstances and the final rule matter.
Who could be affected
The potential impact depends on the final form and rule, the credits a household claims, the amount of any refundable excess, and whether the taxpayer meets the applicable eligibility category. AP reported that the proposed policy could affect some people who currently qualify for certain credits, including people covered by DACA, temporary protected status, and temporary H-1B workers. That is a general impact reported about the proposal, not an individual eligibility ruling.
An Individual Taxpayer Identification Number (ITIN) is used for tax purposes and does not itself establish a person’s immigration status or eligibility for a particular credit. The National Taxpayer Advocate’s 2024 report counted 3.8 million returns using an ITIN, as reported by AP. AP also cited IRS data showing that taxpayers filing nearly 4 million such returns paid $14.4 billion in income taxes and $6.5 billion in Social Security and Medicare taxes; the year for those payment figures was not specified in AP’s report. Neither the return count nor the tax payments identify a count of undocumented taxpayers.
What the government’s estimates do—and do not—show
Treasury and the IRS estimated in 2026 that 49 million returns would claim at least one of the four affected credits for tax year 2026. They estimated that 24 million taxpayers would have an affected credit with a refunded portion considered a federal public benefit under the proposal.
| Agency estimate for tax year 2026 | What it counts | Important qualification |
|---|---|---|
| 49 million returns | Returns expected to claim at least one of the four affected credits. | Treasury and IRS estimate, 2026. |
| 24 million taxpayers | Claimants whose affected credit would produce a refunded portion treated as a federal public benefit. | Treasury and IRS estimate, 2026. |
| 200,000 to 700,000 taxpayers, or 0.8% to 2.8% of the 24 million | People the agencies estimated would likely be ineligible for that benefit portion under the proposal. | The agencies said they lack direct data on qualified-alien status. The estimate draws on other administrative and historical data and assumes static behavior. |
These estimates describe the agencies’ modeled reach and likely ineligibility under a proposal; they are not a count of people already denied credits under a final rule. The agencies’ stated data limitation also means the ineligibility range should not be treated as a precise count.
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Why the question has prompted concern
Treasury frames the proposed regulations as enforcement of public-benefit eligibility rules. In the IRS release announcing the proposal, Treasury Secretary Scott Bessent said: “Under President Trump, the days of illegal aliens collecting taxpayer-funded benefits are over. The federal law is clear, and Treasury is enforcing it.” That is the administration’s characterization of a proposal, not a court ruling or a final regulatory determination.
Advocates quoted by AP questioned whether the new status question is needed to process tax returns or credits and warned that it could raise fears about immigration enforcement. Nina Olson, executive director of the Center for Taxpayer Rights, told AP: “Your citizenship or residency status is not information the IRS needs to process a return. It’s not even information the IRS needs to process these tax credits. The IRS already has Social Security data on taxpayers, as well as ITIN information. It already has what it needs to process a return.” That is Olson’s view, not an IRS finding.
What is known about tax privacy—and what remains unanswered
The IRS has statutory confidentiality obligations, and unauthorized disclosure can carry penalties. Those protections do not, by themselves, resolve whether information could be disclosed under a particular legal exception or how responses to a new question would be used. AP reported that Treasury said the information would be subject to privacy and disclosure protections, but did not say whether responses would be shared with immigration-enforcement agencies. The available reporting therefore does not establish either that sharing will occur or that it will not.
The reviewed sources also do not settle the final Form 1040 wording or the outcome of the proposed regulations. They contain no independent study of how the draft question might change filing behavior. Claims that the question will cause a specific drop in filing or a particular revenue loss are not established by these sources.
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What to do if you are preparing a return
- Do not treat the draft question or proposed credit rules as final instructions. Check the final 2026 forms and the status of the rulemaking when they are issued.
- If you claim one of the four credits, distinguish the amount that offsets income-tax liability from any refunded amount; the proposed eligibility rule concerns the refunded portion.
- If your situation involves work authorization, immigration status, or a joint return, do not infer eligibility from a visa category or ITIN alone. A qualified tax professional or immigration attorney can assess your specific circumstances against final rules.
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