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Your 2026 tax return may include a question that most taxpayers have never seen before: What is your immigration status?
For some families, the answer could affect how much refundable tax credit they receive.
The IRS has prepared a new Schedule 3-A (Form 1040). It affects several widely used tax credits, including the Earned Income Credit and the Additional Child Tax Credit.
Under the new Schedule 3-A, the IRS would separately calculate the portion of certain refundable tax credits that is considered a Federal Public Benefit.
The form applies to four tax credits:
• Earned Income Credit (EIC);
• Additional Child Tax Credit (ACTC);
• refundable portion of the American Opportunity Credit;
• refundable portion of the Adoption Credit.
And this is where things get interesting.
Line 7 asks whether the taxpayer wants to receive the calculated Federal Public Benefit. The taxpayer can answer “Yes” or “No.”
In addition, the form includes another unusual question:
“Are you or your spouse a U.S. citizen, U.S. national, or qualified alien?”
The U.S. Department of the Treasury and the IRS are proposing new rules for these four tax credits. Under the proposal, their refundable portions would be treated as Federal Public Benefits for purposes of PRWORA.
PRWORA (Personal Responsibility and Work Opportunity Reconciliation Act) is a 1996 federal law. Among other things, it defines which categories of immigrants may qualify for certain federal public benefits.
This is where an important limitation comes in.
If a person does not meet the requirements under PRWORA, they could lose eligibility for the refundable portion of these tax credits.
This could affect people who are not U.S. citizens or U.S. nationals. Their immigration status would determine whether they meet PRWORA requirements.
Importantly, the relevant status would be determined on the date the tax return is filed. This applies to the return on which the credit is first claimed.
There is another important distinction.
Being a U.S. tax resident does not necessarily mean that a person meets the immigration requirements under PRWORA.
For example, someone may file Form 1040 and have a Social Security Number or employment authorization. However, those facts alone do not automatically mean that the person meets PRWORA requirements for these federal benefits.
No. And this is a very important distinction.
We are not talking about the entire tax refund.
For example, your employer may have withheld federal income tax from your paycheck throughout the year. After you file your tax return, you may be entitled to receive some of that money back.
That refund does not become a Federal Public Benefit simply because of Schedule 3-A.
The proposed restriction applies only to the separately calculated refundable portion of the affected tax credits.
Therefore, it would be incorrect to say that “immigrants will no longer receive tax refunds.”
Suppose you are not a U.S. citizen and expect to claim one of these tax credits. In that case, your immigration status could become an important part of preparing your 2026 tax return.
This includes the Earned Income Credit and the Additional Child Tax Credit. It also includes the refundable portions of the American Opportunity Credit and the Adoption Credit.
Tax professionals should also prepare for additional questions. In particular, it will be important to distinguish between tax residency, immigration status, and status under PRWORA.
None of these changes are final yet.
Schedule 3-A is currently available only in draft form. The related Treasury and IRS regulations are also proposed, not final.
Therefore, the form and procedures could still change before the 2027 filing season.
However, the appearance of Schedule 3-A already shows the direction of the proposed changes. That is why it will be important to review the final version before preparing 2026 tax returns.