IRS releases updated tax numbers for 2026
The IRS releases updated federal income tax brackets and standard deductions for tax year 2026, which apply to returns filed in 2027.
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Tax season is approaching like clockwork in the United States. Once again, documents, receipts and statements occupy kitchen tables and community offices as millions of families prepare their tax returns. But this year, for immigrant households — blended families, Dreamers, ITIN taxpayers — the ritual is fraught with questions.
President Donald Trump’s administration has launched a proposal that could fundamentally change access to key tax credits. The U.S. Treasury’s announcement has raised alarm among taxpayers and community groups, saying benefits that previously helped families balance their budgets may no longer arrive starting in fiscal year 2026.
What is the Treasury proposing and why would it change the rules of the game?
The Treasury Department said it plans to reclassify some refundable tax credits as “federal public benefits” under the 1996 law known as PRWORA. These include the Earned Income Credit (EITC), Child Credit, Education Credit, and Saver Matching Credit.
This twist is no small thing. By considering them a public benefit rather than just a tax instrument, the government could limit their access to U.S. citizens and certain eligible immigrants. In reality, people who currently work, pay taxes, and abide by the law could be excluded, even if they continue to contribute to the national treasury every year.
Who stands to lose the most from tax credit changes?
Groups most at risk include DACA holders, Temporary Protected Status (TPS) holders, temporary permit workers, international students, and family members who file taxes with ITIN numbers. For many people, these loans represent the difference between covering basic expenses and taking on more debt.
“That ITIN number is given by the IRS to people who don’t qualify for Social Security. Last year they were eligible for a credit of up to $2,000, but this year they’re no longer eligible,” return preparer Jeffrey Peña explained to Spectrum Noticias. According to the Institute on Taxation and Economic Policy, immigrants without legal status contribute nearly $100 billion in federal, state, and local taxes, even though they lack access to benefits such as Social Security and Medicare.
Is this change legal? What do experts currently recommend?
Experts warn that changes of this magnitude would normally require action by Congress. Indeed, the U.S. Department of Justice’s Office of Legal Counsel has issued an opinion supporting the reinterpretation, and the Treasury Department is expected to issue formal regulations that will go into effect in 2026.
In the meantime, the advice is clear. That means filing your taxes is still important. “While it may seem unfair and confusing, filling out a tax return protects your tax history, which can change in court or through other legislation,” Peña stressed. Seeking trusted advice, preserving documentation and avoiding misinformation can make a difference for affected families.
Boris Q’va is a national Spanish language trends news reporter for Connect/USA TODAY Network. You can follow him on X as @ByBorisQva or write to him at BBalsindesUrquiola@gannett.com.
