Federal Register #REG-119882-25

IRS Proposed Rule: PRWORA Eligibility for Refunded Federal Tax Credits

This proposed rule from the Internal Revenue Service (IRS), under the Department of the Treasury, clarifies eligibility for the refunded portion of certain Federal income tax credits under the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA). - Government Buyer: - Department of the Treasury, Internal Revenue Service (IRS), Office of Associate Chief Counsel (Income Tax & Accounting) - Products/Services Requested: - No commercial products or services are being procured; this is a regulatory action affecting tax credits - Tax credits addressed: - Adoption Tax Credit (Section 23 of the Internal Revenue Code) - Child Tax Credit (CTC, Section 24) - American Opportunity Tax Credit (AOTC, Section 25A) - Earned Income Tax Credit (EITC, Section 32) - Unique or Notable Requirements: - The refunded portion of these credits is classified as a Federal public benefit - Only U.S. citizens, nationals, or qualified aliens are eligible for the refunded portion - Claimants must self-certify eligibility under penalty of perjury - IRS forms and instructions will be updated to reflect these requirements - Public comment and a hearing are provided for - OEMs and Vendors: - No OEMs or commercial vendors are involved, as this is not a procurement opportunity

Description

This proposed rule contains regulations that classify the refunded portion of certain refundable Federal income tax credits as a Federal public benefit under the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA). Consequently, aliens who are not qualified under PRWORA would be ineligible to receive these refunded credits. The rule affects taxpayers claiming the adoption tax credit, the American opportunity tax credit, the child tax credit, and the earned income credit. It also includes provisions for public comments and a scheduled public hearing.

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