The United States Justice Department has issued a warning to states that failing to report undocumented immigrants could result in the loss of billions of dollars in federal social assistance funds, according to a legal opinion referenced by Reuters.
The department’s legal office stated that states receiving funding from two critical social assistance programs must report to the Department of Homeland Security (DHS) all individuals residing illegally in the United States that state authorities are aware of.
This represents a significant shift that intensifies pressure on states. Previously, only state agencies administering these funds were obligated to report, while other institutions, such as universities and departments of motor vehicles (DMVs), which issue driver’s licenses, were exempt.
The legal opinion by Deputy Attorney General Joshua Craddock notes that “failure to comply with this obligation may have serious consequences, including loss of funding for programs.”
Since beginning his second term in January 2025, President Donald Trump has aggressively curtailed both legal and illegal immigration in the U.S. Immigration and Customs Enforcement (ICE) agents have been deployed across cities nationwide, collaborating increasingly with state and local authorities, as well as private companies, to identify undocumented immigrants.
The Washington government has attempted several times to penalize states that sought to limit their cooperation with federal agencies.
The measure referenced by Craddock could face legal challenges from states with Democratic administrations, which have already filed lawsuits against the DHS to prevent the agency from accessing personal data of beneficiaries in one of the targeted programs, Temporary Assistance for Needy Families (TANF). Some courts have limited the Trump administration’s actions requiring the communication of information about migrants to DHS, although in some instances judges have permitted immigration authorities to receive certain data, such as that from the Medicaid health insurance program.
Federal Funding Amounts to Billions of Dollars
All 50 U.S. states, along with the District of Columbia and several U.S. territories, receive funding from these two programs, which include Supplemental Security Income (SSI).
Reuters contacted eight state attorneys general, who did not immediately respond to requests for comments regarding their possible reactions.
Annual federal allocations for TANF exceed $16.5 billion, while SSI funding surpasses $60 billion. Undocumented immigrants are not eligible for either program.
According to the Justice Department’s opinion—while not a law, it is binding for federal agencies—the previous regulation issued in 1998 incorrectly limited the applicability of the Personal Responsibility and Work Opportunity Reconciliation Act by using the term “State” to refer to a specific state agency, rather than encompassing all.
States may have information about millions of undocumented immigrants within their jurisdictions; at least 19 U.S. states and the District of Columbia allow undocumented immigrants to obtain driver’s licenses, and many public universities accept students in such situations.
