The U.S. Department of the Treasury is the latest agency to announce that it is working to cut off federal tax benefits for illegal immigrants and stop illegal cross-border money transfers.
Treasury Secretary Scott Bessent shared a post on X from President Donald Trump, announcing “we are working to cut off federal benefits to illegal aliens and preserve them for U.S. citizens.”
Bessent wrote on X that, under Trump’s directive, the U.S. Treasury will propose new regulations “clarifying that the refunded portions of certain individual income tax benefits are no longer available to illegal and other non-qualified aliens.”
At @POTUS @realDonaldTrump's direction, we are working to cut off federal benefits to illegal aliens and preserve them for U.S. citizens.@USTreasury announced that it will issue proposed regulations clarifying that the refunded portions of certain individual income tax benefits… https://t.co/pn2MXoxDHC
— Treasury Secretary Scott Bessent (@SecScottBessent) November 28, 2025
Those tax credits include the Earned Income Tax Credit, the Additional Child Tax Credit, the American Opportunity Tax Credit, and the Saver’s Match Credit under the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, according to a news release.
The Treasury Department announced on Nov. 20 that the new rules would reclassify those tax credits as federal public benefits, making illegal immigrants and nonqualified aliens ineligible to receive them.
Bessent said Treasury’s Office of Tax Policy and the Internal Revenue Service “have worked tirelessly to advance this initiative and ensure its successful implementation.”
“Under President Trump’s leadership we are enforcing the law and preventing illegal aliens from claiming tax benefits intended for American citizens,” Bessent said. “Their diligence and professionalism reflect this Administration’s determination to uphold the integrity of our tax system. We will continue to ensure that taxpayer resources are directed only to those who are entitled under the law.”
The Department of Justice’s Office of Legal Counsel recently issued an opinion adopting this interpretation that certain individual income tax credits are “federal public benefits.” The Treasury’s final regulations are expected to apply beginning in tax year 2026, Fox Business reported.
The impact of the rule will depend on how it is written, meaning it is unclear if the decision will impact foreign workers, student visas, or families with children who are U.S. citizens, Newsweek reported.
Illegal immigrants are generally prohibited from obtaining U.S. work authorization and most taxpayer-funded benefits, but there are loopholes. Some can gain work authorization through programs such as Deferred Action for Childhood Arrivals or Temporary Protected Status.
Trump’s February executive order barred illegal immigrants from access to federally funded benefits. The New York Post noted that Trump argued that “numerous administrations have acted to undermine the principles and limitations directed by the Congress” in the decades since PRWORA’s passage.
Trump, outraged over Wednesday’s targeted attack on two National Guard members in Washington, D.C., made the lengthy midnight post on Thanksgiving.
The suspected shooter, Rahmanullah Lakanwal, 29, is an Afghan national who entered the U.S. in 2021 following Biden’s botched withdrawal in Afghanistan.
Trump described how “a migrant earning $30,000 with a green card will get roughly $50,000 in yearly benefits for their family” but didn’t detail how a green card holder would receive them.
Trump claimed that illegal immigrants and refugees are being “supported through massive payments from Patriotic American Citizens who, because of their beautiful hearts, do not want to openly complain or cause trouble in any way, shape, or form. They put up with what has happened to our Country, but it’s eating them alive to do so!”
In a separate post on X, the Treasury Department said that “illegal aliens present significant threats to national security and public safety.”
Both Bessent and the Treasury Department shared a news release on Friday from the Treasury’s Financial Crimes Enforcement Network, which issued an alert to financial institutions regarding cross-border funds transfers involving illegal aliens.
The FinCEN alert urges financial institutions and money services businesses to be vigilant in detecting and reporting suspicious activity connected to cross-border money transfers.
The alert is designed to prevent illegal aliens from exploiting the U.S. financial system by moving illicitly obtained funds, particularly transactions that benefit Mexico-based cartels, several of which have been designated as Foreign Terrorist Organizations.
“Money services businesses should be vigilant in identifying suspicious financial activity involving illegal aliens who present significant threats to national security and public safety,” said Under Secretary for Terrorism and Financial Intelligence John K. Hurley. “At Treasury, we will continue to protect the American people by faithfully upholding the laws of the United States.”
Bessent added in a follow-up post on X: “Illegal aliens that use our financial institutions to move their illicitly obtained funds is exploitation, and it will end.”
.@POTUS @realDonaldTrump is right—if you’re here illegally, there’s no place for you in our financial system.
Illegal aliens that use our financial institutions to move their illicitly obtained funds is exploitation, and it will end.https://t.co/mIy7fFWWNw.
— Treasury Secretary Scott Bessent (@SecScottBessent) November 28, 2025
Money services businesses include check cashers, remittance processors and digital payment processors. They are generally required to file a suspicious activity report for a transaction that involves at least $2,000, particularly if the MSBs know, suspect or have reason to suspect it is related to a possible legal or regulatory violation.
Those transactions include the cross-border transfer of funds derived from unlawful employment or that were otherwise illicitly obtained in the U.S.
“While the vast majority of remittances from the United States are legitimate and can provide critical financial support to family members abroad, FinCEN previously cautioned that malign actors have used low-dollar cross-border funds transfers to facilitate or commit terrorist financing, narcotics trafficking, and other illicit activity,” FinCEN wrote in the alert.
