Treasury Secretary Scott Bessent announced on Friday that the Trump administration plans to prevent illegal immigrants from receiving federal tax benefits and using money transfer services.
“At the direction of President Trump, we are working to exclude illegal aliens from federal benefits while ensuring they remain available for U.S. citizens,” Bessent shared.
As part of this initiative, officials noted that the Treasury Department will suggest new regulations defining the refundable aspects of certain income tax benefits, like the Earned Income Tax Credit and Supplemental Child Tax Credit, as unavailable to illegal aliens.
Bessent highlighted two social media updates that aimed to present the efforts of the Treasury Department in line with President Trump’s immigration agenda.
The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 essentially bars undocumented immigrants from receiving most taxpayer-funded benefits.
However, President Trump, in a February executive order, claimed that since PRWORA’s enactment, various administrations have undermined the legality intended by Congress.
The proposed regulations aim to classify federal tax benefits as “federal public benefits” as defined by PRWORA.
Last week, the department indicated that the Justice Department’s Office of Legal Counsel recently supported this interpretation.
The Treasury expects these final regulations to be implemented starting with the 2026 tax season.
Bessent maintained that eliminating federal tax advantages for illegal immigrants would help secure benefits for American citizens.
In a separate warning, the Treasury Department’s Financial Crimes Bureau alerted money transfer firms to scrutinize transactions that may involve illegally acquired funds.
Bessent remarked that illegal immigrants are exploiting financial institutions to transfer funds earned unlawfully, calling this a practice that “must stop.”
“If you are in the U.S. illegally, you truly have no place in our financial systems,” he asserted.
This warning was released on the same day the Financial Crimes Enforcement Bureau called on money service providers—like check cashers and digital payment processors—to remain alert for suspicious financial activities linked to illegal aliens, which could pose threats to national security.
The alert specified that these businesses typically need to report suspicious activity for transactions over $2,000 that might break federal laws, including those involving funds from illegal employment.
In related news, a report last week indicated significant taxpayer money theft tied to welfare fraud schemes in Minnesota, potentially benefiting the Somalia-based militant group al-Shabaab. The investigation noted that many of the involved individuals are of Somali or Somali-American descent, and funds fraudulently acquired in Minnesota sometimes inadvertently support terrorist organizations when sent to Somalia.
