Working Parents Tax Relief Act of 2026

Key Points

• This bill increases the Earned Income Tax Credit (EITC) for working parents who have children under age 4. For families with one qualifying child under 4, the credit percentage jumps by 42.24 percentage points. For families with two or more young children, the increase is 30.07 percentage points per child (up to 3 children under 4).
• The bill also increases the phaseout percentage by 5 percentage points for each qualifying child under 4 (up to 3 children). This means the credit starts reducing at a faster rate for higher earners, targeting the benefit toward lower-income working families.
• Parents could choose to receive the extra credit as monthly payments spread across the remaining months of the tax year, rather than waiting for a single lump-sum refund. This is designed to help families cover ongoing expenses like childcare and groceries in real time.
• The changes would take effect for tax years starting after December 31, 2025, meaning families could begin benefiting on their 2026 tax returns or through monthly payments during 2026 if the bill is enacted.

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Related Bills

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