The Treasury Department and IRS proposed a rule, issued August 20, 2026, classifying refundable tax credits—including the Child Tax Credit, Earned Income Tax Credit, Adoption Tax Credit, and American Opportunity Tax Credit—as federal public benefits available only to U.S. citizens, U.S. nationals, and 'qualified noncitizens' under federal welfare law. The restriction applies only to the refunded portion of a credit that exceeds a filer's tax liability, not amounts used to offset taxes owed, and could affect asylum applicants, Temporary Protected Status holders, DACA recipients, and some visa holders with valid Social Security numbers, while permanent residents, asylees, and refugees would remain eligible. If finalized by the end of 2026, the rule would take effect for the 2026 tax year; Treasury has also concluded that the premium tax credit and a new retirement savings credit are federal public benefits, though the premium credit will instead be governed by separate eligibility rules under recent legislation. Estimates suggest between 200,000 and 700,000 noncitizens could be disqualified, potentially saving the government up to $2.6 billion in 2026, as part of a broader Trump administration effort to restrict immigrants' access to public benefits.