States must report known illegal immigrants to feds as condition of getting welfare, DOJ rules

By Stephen Dinan - The Washington Times - Wednesday, September 2, 2026

The Justice Department announced a new legal opinion Wednesday finding that states that take federal money to finance their cash welfare programs must report illegal immigrants to the Department of Homeland Security — a move that could potentially defang states’ sanctuary policies.

DOJ’s Office of Legal Counsel, which serves as the in-house lawyer for the Executive Branch, said the federal government can now condition states’ receipt of Temporary Assistance for Needy Families — the main cash welfare program — on whether all of their agencies share information on illegal immigrants.

Previously, the state agencies that handled the programs were required to report illegal immigrants, but other state agencies were exempt.

“Any participating state must report to DHS any person that the state knows to be not lawfully present,” Joshua J. Craddock, a deputy assistant attorney general, concluded in the new opinion.

If that is applied to police and motor vehicle bureaus, it could force states to choose between their existing sanctuary laws and access to federal money.

At issue is the scope of the 1996 welfare reform law.

Previously, the OLC had concluded that the law’s reporting requirements only applied to the actual state agencies that handled TANF. Other state agencies that had knowledge of illegal immigrants weren’t swept in.

The new OLC opinion, dated Tuesday and released Wednesday, overturns that 1998 opinion.

DOJ officials said there won’t be any penalty for states for past behavior, since they were operating in good faith under the previous opinion. But moving forward, the feds can condition billions of dollars in federal money on states’ cooperation.

TANF’s block grants to states total about $16.5 billion a year.

Matthew O’Brien, deputy director at the Federation for American Immigration Reform, said he expects the new interpretation to be challenged in court but said the administration should prevail.

He said it would be an “effective work-around” to state sanctuary policies.