The US Department of Treasury recently issued a proposed rule regarding the Application of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996 to the Refunded Portion of Certain Federal Refundable Tax Credits.

Experts from the Urban-Brookings Tax Policy Center, drawing on an extensive legislative history of the immigration restrictions of these tax credits, highlight how the proposed rule would go beyond past Congressional approaches to deny refundable tax credits to undocumented immigrants and would exclude noncitizens who are allowed to live and work in the US. Their prior research on issues of eligibility, access, and tax administration also suggests that the proposed rule understates potential administrative challenges for the IRS and taxpayers, spillover effects on state tax credits, and adverse consequences for the well-being of immigrant families.