Q: Naturalization form asks if spouse is working, would affirming he works affect his immigration case?

A: Well, the facts are the facts. If you are asking whether you should like on your N-400, my answer obviously is "no". Don't like on your N-400. If you are asking whether he has adverse facts in his case, then "yes", he probably does. How adverse that information is depends on some other things. I'm not going to go through all the potential scenarios for what his current immigration status is and how he's adjusting. I'm going to guess that he entered with inspection perhaps on a B visa or an F1 visa or the Visa Waiver Program - something that does not allow him to work, else this wouldn't be an issue. And I'm guessing that his petitioner-sponsor is you, as opposed to an employer (because, again, then the employment wouldn't be an issue). Once you naturalize, then he becomes the immediate relative of a US citizen and he will be able to adjust status despite previous violations of status and despite previous unlawful employment. So, what's most important here is that you naturalize. And the best way to do that is to be truthful on your N-400. ICE is not going to show up at your door because you revealed on your N-400 that your husband is working without authorization. ICE is way too busy for you. You're not important enough, to be frank. Now, I'm not saying it's ok that he's been working without authorization, but you don't want to compound that violation with another one by providing false information on your N-400. And in the end, as long as he entered lawfully and will be adjusting status through marriage to you, it shouldn't be an issue.

Final word: whenever you are tempted to lie on your forms, that is an alarm going on, telling you that you need a lawyer.