An IRS public hearing is scheduled for Oct. 14, 2026, on a Treasury proposal that would limit the refunded part of the child tax credit, the earned income tax credit and two other credits to U.S. citizens, nationals and qualified aliens. The proposal is not in effect. The notice in the Federal Register, published Aug. 20, says the rule would apply only to tax years ending on or after the date a final version is published.

The hearing is on a proposed regulation numbered REG-119882-25. The notice sets the hearing for Oct. 14 and says it will be canceled if no outlines of planned remarks arrived by Oct. 5. Written comments closed on Oct. 5 as well.

Treasury and the IRS describe the change as an enforcement step. Treasury Secretary Scott Bessent said in the Aug. 19 announcement: “American taxpayers should not be forced to foot the bill for benefits going to those who are barred by law from receiving them.” The question for a family is whether a household member’s immigration category would be one the proposal covers, and what happens to a refund that depends on one of these credits.

Tax credit rules keep changing through proposals like this one, and The Retirement Money Brief explains one change each weekday, who it affects and what to do.

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What the proposal would change

Under the proposal, the refunded portion of four credits would be treated as a federal public benefit under the 1996 welfare law known as PRWORA. The four are the adoption credit, the child tax credit, the American opportunity tax credit for college costs and the earned income tax credit.

Only the refunded portion is the target, meaning the money paid out beyond what a filer owes in tax. A taxpayer would have to be a U.S. citizen, a U.S. national or a qualified alien to receive it. The IRS lists lawful permanent residents, asylees and refugees as examples of qualified aliens. On a joint return, only one spouse would have to meet the test.

The estimate Treasury put on it

The notice carries Treasury’s own estimate of who would be affected. It says approximately 200,000 to 700,000 taxpayers would be hit for tax year 2026, with $0.7 billion to $2.6 billion of credits disallowed. Those are the department’s projections for a proposal that has not been finalized, and a final rule could differ.

Where the process stands

Two public steps remain after the comment period: the hearing and a final rule. The Federal Register entry lists a deadline of Oct. 9, 5 p.m. Eastern, for people who asked to attend the hearing. The IRS has not published a final rule, and the notice gives no date for one. Anyone who wants to follow the hearing can watch the same Federal Register page for updates, because the next official step would be posted there.

The Treasury announcement repeats the same applicability rule as the notice: the regulations would apply to tax years ending on or after the date they are published as final. For a filer whose tax year is the calendar year, 2026 would be covered only if a final rule were published by Dec. 31, 2026. If it comes later, the first affected year would be 2027 or after. That timing is arithmetic on the proposal’s wording, since no final date has been announced.

What families with these credits can do while the rule is a proposal

For now, nothing changes on a return. Households that claim the child tax credit or the earned income tax credit can keep following the current instructions and keep their documents in order. The free place to follow the rule is the Federal Register page for the proposal, which will show a final rule if and when one is published.

Households with mixed immigration status can write down, member by member, which category each person holds and which credits the return claims. That list makes it quick to see whether a final rule reaches a given household, since the proposal turns on the status of the taxpayer and, for joint returns, of at least one spouse. A tax preparer or a free tax help site can walk through the same list.

The Federal Register notice is the document to return to. It says the proposed regulations apply for taxable years ending on or after the date they are published as final regulations in the Federal Register, and nothing earlier.

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This article was produced with AI assistance and edited for accuracy against the Federal Register, IRS and Treasury pages linked above.