(UNITED STATES) — USCIS has told officers to treat adjustment of status as a discretionary decision as well as an eligibility determination, sharpening the focus on how applicants present their records in Form I-485 cases.

The shift came in Policy Memorandum PM-602-0199, issued on May 21, 2026, which described adjustment of status as “a Matter of Discretion and Administrative Grace, and an Extraordinary Relief.”

A later DHS clarification said there was “no major change in policy,” but the agency’s guidance still left applicants facing a more case-by-case review.

USCIS Policy Manual guidance already states that when discretion is part of a benefit request, the applicant must show both eligibility and that USCIS should exercise discretion favorably. In adjustment of status cases, that means clearing the legal requirements does not end the analysis.

Understanding Adjustment of Status

Adjustment of status lets certain people already in the United States seek lawful permanent residence without going to a U.S. consulate abroad.

Employment-based cases often rest on an approved immigrant petition and a current visa number, while family-based cases often turn on an approved or concurrently filed family petition and proof of a qualifying relationship.

Eligibility remains the threshold question. Officers still examine lawful admission or parole, visa availability, admissibility, maintenance of status where required, and whether any bars under section 245(c) of the Immigration and Nationality Act apply.

Discretion asks something different. USCIS weighs the full record and decides whether the applicant should receive approval inside the United States, even after the person has shown statutory eligibility.

That split between eligibility and discretion has become more important for applicants, employers and families preparing adjustment of status filings. A case package now needs to do more than show that the person qualifies on paper; it also needs to explain why approval is warranted.

The Balancing Test: Positive and Negative Factors

Under the agency’s framework, officers can weigh positive and negative factors across the whole file. Positive factors can include long-term lawful presence, steady employment, tax compliance, family ties in the United States, U.S. citizen or lawful permanent resident relatives, employer support, community involvement, education, specialized skills, humanitarian considerations and evidence of good moral character.

Negative factors can include immigration violations, unauthorized employment, status gaps, misrepresentations, criminal history, unresolved arrests, failure to pay taxes, public safety concerns, repeated noncompliance, weak documentation or conduct that conflicts with the stated purpose of admission.

Not every adverse fact ends a case, and not every favorable fact secures approval; officers weigh the balance.

Impact on Employment-Based Applicants

That balancing test affects employment-based applicants who might once have viewed adjustment as a largely technical filing. H-1B and L-1 workers benefit from dual intent, which allows temporary status while pursuing permanent residence, but dual intent does not remove discretionary review.

A worker with continuous status, stable employment and an approved immigrant petition can still face questions about whether the record supports approval. Pay records, tax returns, W-2s, proof of maintenance of status, approval notices, I-94 history, job-offer confirmation and petition records can all help establish that picture.

Job changes, unpaid leave, benching periods, layoffs, unauthorized side work and gaps between statuses can also draw scrutiny. Those issues do not always defeat eligibility, but they can weigh against a favorable exercise of discretion.

Considerations for F-1 Students and OPT Workers

F-1 students, OPT workers and STEM OPT workers face a different set of concerns. Officers may look more closely at school attendance, work authorization, maintenance of status and intent at entry when reviewing these files.

Many students move lawfully from study to work and then to permanent residence, but the record has to support that progression. I-20s, transcripts, enrollment records, SEVIS history, EAD cards, OPT employer information, pay records, training-plan documents, STEM OPT compliance evidence and proof that employment matched authorized training can all matter in discretionary review.

Cases involving Day-1 CPT, school transfers, long gaps, questionable employment arrangements or unexplained periods without study or authorized work can raise harder questions. Even where the case is not automatically barred, officers can treat those issues as negative discretionary factors.

Family-Based Applicants and the Two-Part Structure

Family-based applicants also face the same two-part structure. Immediate relatives of U.S. citizens often benefit from statutory advantages, including relief from some section 245(c) bars that affect other categories, but those advantages do not eliminate the need to build a complete record.

Marriage records, birth certificates, joint residence documents, financial commingling, family photographs, affidavits, tax returns, proof of U.S. citizen children, caregiving responsibilities and hardship evidence can help present the broader picture.

Past immigration violations, unauthorized work, unlawful presence, criminal issues or misrepresentation concerns still require careful treatment before filing Form I-485.

The Critical Role of Tax Compliance

Tax compliance stands out in this review because it can cut both ways. A clean tax record can support a claim that the applicant followed U.S. law and contributed responsibly, while missing returns, payroll inconsistencies, unreported income, unpaid taxes or unexplained cash work can damage the case.

Federal and state tax returns, W-2s, 1099s, IRS transcripts, payment-plan records, proof of withholding and evidence that past problems were corrected can help address those issues. Employment-based applicants also need tax records that match their claimed work history, job titles and authorized employment periods.

Self-employment and side income can present a similar problem. A tax filing that shows income may help establish honesty with tax authorities, but it can also trigger questions if the work was not authorized under the applicant’s immigration status.

Building a Comprehensive Status History

Status history has also taken on more weight in the new environment. Organizing passports, visas, I-94 records, I-797 notices, EAD cards, advance parole documents, I-20s, DS-2019s, H-1B approvals, L-1 approvals, change-of-status notices, extension approvals, prior requests for evidence, prior denials, withdrawal notices and travel records can make the file easier for an officer to assess.

Many practitioners already build timelines showing each period of stay, the status held, the employer or school involved, and any gaps or unusual events. A clear chronology can reduce the risk of requests for evidence, notices of intent to deny or closer interview scrutiny.

Criminal History and Overall Credibility

Criminal and arrest history can affect both admissibility and discretion. Dismissed cases, expunged matters and offenses treated as minor under state law may still carry immigration consequences, which is why certified court records and, where needed, police records remain important in adjustment filings.

A single old incident may be outweighed by strong favorable equities, but a pattern of arrests, unresolved charges or failure to disclose past conduct can be much harder to overcome. In discretionary review, the overall credibility of the file becomes part of the decision.

Navigating the Process and Weighing Options

Applicants now also have to think about process. Under a stricter discretionary approach, more cases may draw requests for evidence, notices of intent to deny and interviews that might previously have ended in approval without much dispute.

That pressure extends to the choice between adjustment of status and consular processing. Some applicants may prefer to remain in the United States because adjustment can preserve work authorization, family unity, medical care and children’s schooling while the case is pending.

Others may need to weigh the separate risks that arise in consular processing, including interview delays, administrative processing, inadmissibility findings and difficulty returning if a case is refused.

The practical effect of the May 21, 2026 memo is not that every Form I-485 case is headed for denial. It is that applicants should assume USCIS will examine two questions at once: whether the person qualifies for adjustment of status, and whether the total record justifies approval under the agency’s discretionary authority.

That is the point now embedded more firmly in the USCIS Policy Manual and the 2026 memorandum. Eligibility gets a case through the door; discretion can decide whether it stays there.