The Draft 2026 Form 1040 Adds a Citizenship and Work Authorization Question: What Tax Professionals Need to Know

September 28, 2026

For enrolled agents, CPAs, and tax preparers | Updated September 24, 2026 | Based on IRS draft forms, not final releases

For the first time, the draft Form 1040 asks taxpayers to state their citizenship or work authorization status. The 2026 draft Form 1040 includes a new yes/no question in its "Other Information" section, answered separately for the taxpayer and the spouse on a joint return. If it survives into the final form, your clients will see it during the 2027 filing season, and you will be the one asking it at intake.

This post covers exactly what the draft says, how it lines up with the new Schedule 3-A and the August 2026 proposed regulations on refundable credits, what is still unknown, and what you can do in your practice now.

Key Takeaways

The draft 2026 Form 1040 asks: "At the time you file your return, are you, and your spouse if filing jointly, a U.S. citizen, U.S. national, or an alien lawfully authorized to work in the U.S.?" (IRS draft Form 1040).
It is a draft. The IRS says "Do not file draft forms," and the instructions for the new line have not been released (IRS Draft Forms).
A separate new Schedule 3-A asks a different question: whether the taxpayer or spouse is a citizen, national, or qualified alien. That answer controls the refunded portion of the EIC, ACTC, refundable AOTC, and refundable adoption credit (draft Schedule 3-A).
"Lawfully authorized to work" and "qualified alien" are different legal tests. Some clients will answer Yes on page 1 and No on Schedule 3-A.
Comments on the proposed refundable-credit regulations (REG-119882-25) are due October 5, 2026. Comments on the draft form can go to IRS.gov/FormsComments with "NTF1040" (Federal Register; IRS).

What does the new Form 1040 question say?

The question sits in a renamed "Other Information" block on page 1, right below Filing Status and above Dependents. In 2025 this area was labeled "Digital Assets." The draft moves the digital asset question and the election to treat a nonresident or dual-status spouse as a U.S. resident into the same block (IRS draft Form 1040; Taxgirl).

The exact text on the draft reads:

"At the time you file your return, are you, and your spouse if filing jointly, a U.S. citizen, U.S. national, or an alien lawfully authorized to work in the U.S.? (see instructions) You: Yes / No Spouse: Yes / No"

Page 1 of the draft 2026 Form 1040 with the new citizenship and work authorization question outlined in red

Figure 1. Page 1 of the draft 2026 Form 1040. The new citizenship and work authorization question (outlined in red) sits in the "Other Information" section. Source: IRS draft Form 1040.

Three details in the wording matter for practitioners:

The test is on the filing date, not the tax year. "At the time you file your return" means a client whose status changes between December 31 and the day you transmit answers based on the day you transmit.
Each spouse answers separately. On a joint return you get two answers, not one household answer.
It says "lawfully authorized to work," not "lawfully present" or "resident." Tax residency under the substantial presence test is a separate question. A resident alien for tax purposes may or may not be authorized to work.

The draft page footer shows it was created on August 19, 2026. Media coverage dates its public posting to September 17, 2026 (IRS draft Form 1040).

Is this question final?

No. The form is marked "DRAFT — DO NOT FILE," and the IRS cover sheet explains that forms are subject to OMB approval and that drafts can change before release (IRS draft Form 1040). The line says "see instructions," but draft 2026 Form 1040 instructions covering it were not available when this post was written.

The IRS has not publicly explained why it added the question or how it will use the answers. NBC reported that the IRS did not respond to requests for comment on the question.

What we don't know yet

How the instructions will define "lawfully authorized to work" and what documents, if any, support a Yes.
What happens if a box is left blank. Will e-file reject the return, or will it be processed?
Whether a No answer changes how any credit, deduction, or refund is computed on its own.
Whether the question will survive to the final form at all.

How does it connect to Schedule 3-A and the proposed refundable-credit rules?

The page 1 question arrived alongside a larger change. On August 19, 2026, Treasury and the IRS proposed regulations (REG-119882-25) that treat the refunded portion of four credits as a "federal public benefit" under the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA): the earned income credit, the child tax credit, the American opportunity tax credit, and the adoption credit (IR-2026-93; Federal Register).

Under the proposal, to receive the refunded portion, the taxpayer must be a U.S. citizen, U.S. national, or qualified alien on the date they file the return that first claims the credit. On a joint return, only one spouse has to qualify. The taxpayer declares eligibility on the return under penalty of perjury (IR-2026-93; Treasury).

The draft forms put this into practice in two places:

Form 1040, lines 32a through 32c. Line 32a totals the refundable credits. Line 32b subtracts the amount from Schedule 3-A. Line 32c is what is left (IRS draft Form 1040).
Schedule 3-A, "Federal Public Benefit." It computes the refundable credits in excess of tax (line 6), asks if the taxpayer wants to receive that benefit (line 7), then asks at line 8: "Are you or your spouse a U.S. citizen, U.S. national, or qualified alien?" A Yes enters zero on line 32b. A No carries the full line 6 amount to line 32b and removes it from payments (draft Schedule 3-A).

Only the portion above tax liability is affected. A taxpayer who is not a qualified alien can still use these credits to reduce tax to zero (Treasury).

Work authorization vs. qualified alien: why the two answers can differ

This is the part of the draft most likely to trip up preparers and software users. The page 1 question and Schedule 3-A line 8 use different legal terms, and the two categories do not line up (Taxgirl).

"Qualified alien" is defined in PRWORA at 8 U.S.C. 1641(b). It covers lawful permanent residents, refugees, asylees, people paroled for at least one year, certain battered noncitizens, and a few other listed groups (Current Federal Tax Developments). Work authorization is broader in some directions and narrower in others. A temporary worker in valid status is authorized to work but is generally not a qualified alien under 1641(b).

	Form 1040, page 1 (Other Information)	Schedule 3-A, line 8
Categories that answer Yes	U.S. citizen, U.S. national, or alien lawfully authorized to work in the U.S.	U.S. citizen, U.S. national, or qualified alien (PRWORA, 8 U.S.C. 1641(b))
Who answers	Taxpayer and spouse, separately	"You or your spouse": one Yes covers the joint return
When status is measured	At the time the return is filed	On the date the return first claiming the credit is filed (proposed regs)
Who must complete it	Every Form 1040 filer (as drafted)	Only filers claiming EIC, ACTC, refundable AOTC, or refundable adoption credit
Tax effect shown on the draft	None stated on the form. Instructions pending.	A No removes the refunded portion via line 32b

Table 1. Comparison built from the draft Form 1040, draft Schedule 3-A, and IR-2026-93.

An illustrative example: a single client in the U.S. on a work visa meets the substantial presence test, files Form 1040, and has earned income plus a qualifying child with a work-eligible SSN. On the draft forms, that client would likely answer Yes on page 1 (authorized to work) but No on Schedule 3-A line 8 (not a qualified alien). The refunded portion of the ACTC would then drop out on line 32b. Confirm status category and final instructions before applying this to a real client.

How does this relate to the OBBBA work-eligible SSN rules?

Several benefits already depend on work-eligible SSNs, which is why many practitioners read the page 1 question as a screening data point. The IRS has not said so, so treat that as analysis, not guidance. The existing rules include:

Child tax credit. The taxpayer (or at least one spouse on a joint return) and each qualifying child must have an SSN valid for employment, issued by the return due date including extensions (IRS Child Tax Credit).
No tax on tips. The taxpayer and/or spouse who received the qualified tips must have an SSN valid for employment (IRS).
No tax on overtime. The taxpayer who received qualified overtime must have an SSN valid for employment and include it on the return (IRS).

An SSN valid for employment shows that work authorization existed when the SSN was issued. It does not prove current status on the filing date. That gap is one reason the page 1 question asks about status "at the time you file."

Why is this question drawing attention beyond tax compliance?

Timing. The draft arrived during litigation over sharing IRS data with immigration enforcement. On February 26, 2026, a federal district judge ruled the IRS violated Section 6103 about 42,695 times by disclosing last known taxpayer addresses to ICE (JURIST). In September 2026, a federal appeals court upheld an injunction blocking that sharing (Washington Times).

Commentators have raised the concern that the question could discourage some mixed-status households from filing at all (Forbes; NBC Philadelphia). For practitioners, the practical point is that clients will ask you who sees this answer. Be ready to explain Section 6103 confidentiality accurately, and don't promise outcomes the law and the courts haven't settled.

What should tax professionals do now?

Get your practice ready for January:

Update your intake organizer. Add the citizenship/work authorization question for the taxpayer and spouse, plus a separate qualified alien question for anyone who may claim EIC, ACTC, AOTC, or the adoption credit.
Train staff on the two tests. Make sure no one treats "work authorized," "qualified alien," and "resident alien for tax purposes" as the same thing.
Let the client answer. Both questions are declared under penalty of perjury. Record the client's answer. Don't infer it from an SSN card or visa type.
Review your due diligence file. For clients claiming EIC, CTC/ACTC, or AOTC, note how eligibility was confirmed, along with your existing Form 8867 documentation.
Flag affected clients early. Identify ITIN households, mixed-status households, and clients with pending immigration cases, and talk through refund expectations before filing season.
Refer immigration questions. When a client's immigration status is unclear, refer them to a qualified immigration attorney. Don't make that determination yourself.
Watch for the final form and instructions. Check IRS.gov/DraftForms and your software vendor's release notes. The final version may differ.
Comment if you have practitioner insight. REG-119882-25 comments are due October 5, 2026. The public hearing is scheduled for October 14, 2026, and will be cancelled if no one asks to speak (Federal Register). Form comments can go to IRS.gov/FormsComments with "NTF1040" in the message.

Frequently asked questions

When will taxpayers first see this question?

If it stays in the final form, on 2026 tax year returns filed in 2027.

Does answering No reduce a client's refund?

On the draft forms, the refund reduction runs through Schedule 3-A line 8 (qualified alien), not the page 1 question. The page 1 question's effect depends on instructions the IRS hasn't released yet (draft Schedule 3-A).

Do the proposed refundable-credit rules apply to 2026 returns?

The proposed regulations would apply to tax years ending on or after the date final regulations are published (IR-2026-93). If they are finalized by December 31, 2026, they would reach 2026 returns. They are not final today.

On a joint return, does one citizen spouse protect the refundable credits?

Under the proposal and the draft Schedule 3-A, yes. If either spouse is a citizen, national, or qualified alien, the answer on line 8 is Yes (IR-2026-93; draft Schedule 3-A). The page 1 question still asks each spouse separately.

Bottom line

The draft 2026 Form 1040 adds a status question to page 1 and a separate qualified alien test on Schedule 3-A that directly affects refundable credits. Neither is final, and the instructions that will decide how they work haven't been published. The practices that do best in 2027 will have updated their intake questions, trained staff on the difference between the two tests, and talked with affected clients before the season starts.

Sources

Disclaimer: This article is for informational purposes and reflects IRS draft forms and proposed regulations as of September 24, 2026. It is not legal or immigration advice. Confirm against final IRS forms, instructions, and regulations before relying on it for any return.