The Trump administration has proposed requiring U.S. taxpayers to disclose their citizenship and work authorization status to the IRS on the annual tax form that nearly all workers file each year.

The administration claims the proposed requirement would help federal officials stop illegal migrants from collecting federal benefits they are not eligible for, which officials argue could save taxpayers up to $2 billion.

The IRS posted its draft 1040 form for 2026 in late August, which includes the 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 form has "Yes" and "No" checkboxes for both the filer and their spouse.

A draft of a second form, Schedule 3-A, which is used to claim refundable tax credits, features a similar question.

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Under the proposal, every tax filer must certify their immigration or citizenship status to the IRS under penalty of law to file their return.

The Treasury Department said the new question aims to keep illegal migrants from taking advantage of refundable tax credits like the Earned Income Tax Credit or the Additional Child Tax Credit, that low- and middle-income workers and families may qualify for and that often result in a refund for eligible taxpayers.

The information collected will be "subject to a variety of privacy, disclosure and other legal protections," a Treasury official said in a statement without disclosing whether the information would be shared with federal immigration enforcement to target a person for arrest and deportation.

While illegal migrants are not authorized to live and work in the U.S., they still do pay taxes. For example, illegal migrants typically pay into Social Security but generally cannot collect Social Security benefits unless they later become eligible under federal law.

In 2024, the National Taxpayer Advocate found 3.8 million tax returns where a taxpayer used an Individual Tax Identification Number, or ITIN. An ITIN can be issued for multiple purposes, but undocumented workers who cannot obtain a Social Security number are among the people who use them.

According to IRS data, taxpayers who filed those nearly 4 million returns paid $14.4 billion in income taxes and $6.5 billion in Social Security and Medicare taxes.

A valid Social Security Number is required to qualify for the Earned Income Tax Credit, while workers with only an ITIN do not qualify. The IRS checks Social Security Numbers against Social Security Administration records for each claim of the Earned Income Tax Credit.

Illegal migrants are generally not eligible for federal benefits. Eligibility for refundable tax credits depends on federal tax law and immigration status. Current law generally requires a valid Social Security number for the Earned Income Tax Credit, while eligibility for the Additional Child Tax Credit varies based on statutory requirements. The Trump administration's proposal would further limit eligibility by applying standards under the Personal Responsibility and Work Opportunity Reconciliation Act to certain refundable tax credits.

However, some migrants in the U.S. who are currently for some of these credits would not be eligible under the new policy, such as people covered under the Obama administration's Deferred Action for Childhood Arrivals, those with temporary protected status and temporary workers in the country under H1-B visas.

The Trump administration claims that the Personal Responsibility and Work Opportunity Reconciliation Act, which governs who is eligible for benefit programs, should also be applied to refundable tax credits.

A research paper published this week estimates that 671,000 people, including 309,000 children, would lose the Earned Income Tax Credit under this proposal. Another 1.1 million people, including 574,000 children, would lose the Additional Child Tax Credit.

Most of the children who would lose eligibility to these credits are U.S. citizens due to at least one of their parents' citizenship or immigration status, according to the researchers at Boston University, Columbia University and the Institute on Taxation and Economic Policy.

Critics of the new policy view it as a new checkbox that gives the federal government even more information on taxpayers. Illegal migrants would face a complicated choice to either declare on a tax return that they are unlawfully in the U.S., which could potentially make them a target for immigration-related arrests, or lie on the return, which is a felony.

Some migrants may opt for a third option and stop filing their taxes altogether.

"It could be used as an immigration enforcement tool and that is probably the reason why they are doing this," David Bier, director of immigration studies at the libertarian-leaning Cato Institute, told The Associated Press.

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"It’s dragging the IRS into this administration’s immigration policies," said Nina Olson, executive director for the Center for Taxpayer Rights.

The Trump administration has previously attempted to use the IRS to carry out its immigration agenda.

Last year, the Treasury Department agreed to share confidential taxpayer information of migrants with Immigration and Customs Enforcement to help the agency identify people for deportation.

The data-sharing agreement was blocked by a federal judge, ruling that it violated federal taxpayer privacy laws. But before it was stopped, the IRS had already given ICE the addresses of 47,000 people.

The Associated Press contributed to this report.