Compliance November 25, 2025

US Treasury to Bar Undocumented Immigrants from Saver’s Match

The SECURE 2.0 Act previously said undocumented immigrants become eligible for tax credits if they are married to a US citizen and treated as a US resident for tax purposes.

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The Treasury Department announced that it will disallow undocumented immigrants from receiving the Saver’s Match and other tax credits, even if they pay taxes.

The department’s November 20 announcement stated that the agency intends to provide a future notice that would clarify that the Earned Income Tax Credit, the Additional Child Tax Credit, the American Opportunity Tax Credit, and the Saver’s Match Credit are federal public benefits under the Personal Responsibility and Work Opportunity Reconciliation Act of 1996.

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By doing so, undocumented immigrants would no longer qualify for, and would lose access to, the tax credits, since, according to an accompanying Department of Justice opinion, the PRWORA “generally prohibits” undocumented immigrants from receiving federal public benefits.

The Saver’s Match is meant to work as a support for lower-income taxpayers to save for retirement. It will take effect for tax years starting after December 31, 2026.

As part of the SECURE 2.0 Act, Congress changed what was a tax credit refunded in cash to a federal matching contribution, which must go directly into a taxpayer’s IRA or retirement plan. The match amounts to 50% of contributions, capped at $2,000 per individual. It phases out for joint filers with incomes between $41,000 and $71,000; for single taxpayers and those married filing separately, the range is $20,500 to $35,500; and for head-of-household filers, it spans $30,750 to $53,250.

The credit is treated as a pre-tax contribution to the recipient’s retirement plan or IRA and it will be taxable as income when distributed.

The SECURE 2.0 Act’s legislative text indicates that undocumented immigrants are ineligible for the Saver’s Match under certain circumstances. However, the law states that undocumented immigrants become eligible if they are married to a U.S. citizen and treated as a resident of the United States for tax purposes. It is not clear how the Treasury Department’s announcement would apply to this provision of SECURE 2.0.

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