The Internal Revenue Service has placed a citizenship and work-authorization question on its draft 2026 individual income-tax return, a proposed change that would require filers and spouses to disclose information the standard Form 1040 has not previously collected.

The question appears on the first page of the draft Form 1040. It asks whether the taxpayer — and a spouse when filing jointly — is a U.S. citizen, U.S. national or an alien lawfully authorized to work in the United States. Each person would select “yes” or “no.” The document is explicitly marked as an early-release draft and not for filing, meaning the language could change before taxpayers submit 2026 returns in 2027.

The administration says the disclosure would help enforce restrictions on refundable tax credits and could prevent as much as $2 billion in improper payments, according to The Associated Press. Taxpayer advocates counter that the IRS already receives Social Security and taxpayer-identification data needed to administer current credit rules, while collecting a direct status declaration could discourage some households from filing.

A form change linked to a broader rule

The new 1040 question accompanies a Treasury Department and IRS proposal to treat the refunded portions of four credits as federal public benefits under the 1996 welfare law known as PRWORA. The affected credits are the Earned Income Tax Credit, Additional Child Tax Credit, refundable American Opportunity Tax Credit and the newly refundable portion of the adoption credit.

The proposed regulation would require a taxpayer claiming a covered refund to certify, under penalty of perjury, that the claimant is a citizen, national or “qualified alien” when the return is filed. Treasury says only the portion exceeding income-tax liability would be treated as a public benefit; the rule would not erase the underlying credit used to reduce tax owed.

That distinction matters. The broad question is printed on the main return used by most individual filers, while the proposed benefit restriction is aimed at the refundable portions of specified credits. A companion Schedule 3-A would calculate the covered refund and carry the required attestation. The draft therefore combines a universal disclosure question with a narrower financial consequence tied to particular claims.

Who could be affected

The policy would not be limited to people living in the country without authorization. PRWORA's “qualified alien” category is narrower than the population legally authorized to work, potentially affecting some recipients of Deferred Action for Childhood Arrivals, people with Temporary Protected Status and certain temporary visa holders who currently satisfy tax-code requirements.

A September 30 research brief from Boston University, Columbia University and the Institute on Taxation and Economic Policy estimates that about 671,000 people live in families that could lose Earned Income Tax Credit eligibility and about 1.125 million live in families that could lose the refundable Additional Child Tax Credit. Those groups overlap: the researchers estimate roughly 566,000 people could be affected by both provisions. Nearly nine in 10 children in the affected families are U.S. citizens, the analysis says.

Those figures are projections, not a count of benefits already denied. They depend on the rule becoming final, the forms retaining their draft language and household eligibility in a future filing year. The estimates also measure people living in potentially affected families, not only the adults who sign tax returns.

Existing rules already limit access to major credits. The IRS says an EITC claimant, a spouse on a joint return and any qualifying child must have a valid Social Security number, and the claimant generally must be a citizen or resident alien for the full year. An Individual Taxpayer Identification Number does not qualify a filer for the EITC. The proposed rule would apply a separate immigration-law classification to the refundable benefit.

Privacy and compliance questions

Treasury told AP that the new information would remain subject to tax privacy and disclosure protections but did not say whether it could be shared with immigration authorities. That uncertainty is consequential because the administration previously established a process for the IRS to provide taxpayer addresses to Immigration and Customs Enforcement.

In September, the U.S. Court of Appeals for the District of Columbia Circuit left an injunction against that process in place. The court's opinion described ICE requests covering more than 1.2 million people and the IRS's release of roughly 47,000 taxpayer records. The court concluded that the challengers were likely to show the automated procedure failed statutory requirements for disclosing confidential return information in criminal investigations.

The earlier data-sharing case does not automatically decide whether the new tax-form question is lawful. It does, however, shape the practical debate: tax administration depends on voluntary compliance, and filers asked to declare their status may weigh the legal duty to report income against fears that the answer could be used beyond calculating tax.

The proposal now presents two separate policy tests. Treasury must justify the legal basis for reclassifying refundable credits under PRWORA, while the IRS must determine whether asking every filer about citizenship or work authorization is necessary and appropriately protected. Until the rule and forms are finalized, taxpayers should treat the documents as proposals — significant ones, but not yet the final instructions for filing a 2026 return.