H.R. 7865: American Consumer Tariff Rebate Act of 2026

This bill, known as the American Consumer Tariff Rebate Act of 2026, aims to provide direct financial refunds to taxpayers due to increased consumer costs caused by tariffs that were imposed without congressional approval. The key points of the bill are as follows:

Findings

The bill outlines that:

• The U.S. Constitution grants Congress the exclusive authority to impose tariffs.
• Some tariffs, enacted through Presidential action, have led to significant price increases for consumers.
• Estimates suggest these tariffs have raised consumer costs by about $231 billion.
• Congress has a duty to compensate taxpayers for these increased costs, particularly prioritizing working families while not including those with very high incomes.

Definitions

Key terms used in the bill include:

• Covered tariffs: Tariffs that were imposed through Presidential decree and later found to lack congressional authorization.
• Eligible return: Any federal individual income tax return filed for the latest taxable year.
• Qualified child: A child recognized under the Internal Revenue Code for tax credits.
• Secretary: Refers to the Secretary of the Treasury or their delegate.

Establishment of Taxpayer Rebate

The law establishes a system for direct payments to eligible taxpayers:

• A one-time direct payment will be made to each eligible return.
• Taxpayers with an adjusted gross income exceeding $400,000 are ineligible for these payments.
• Total payments cannot exceed $231 billion.

Payment Amounts by Filing Status

The amounts paid will vary based on the taxpayer's filing status:

• Single filers will receive a payment equal to 100% of a determined base amount.
• Married filing separately will also receive 100% of the base amount.
• Heads of households will receive 150% of the base amount.
• Married filing jointly and qualifying surviving spouses will receive 200% of the base amount.

Child Bonus Funded by High-Income Exclusion

In addition to the rebates, there will be a Child Bonus for eligible taxpayers:

• This bonus will be available for families claiming qualified children, equal to $125 for each child.
• Funding for the Child Bonus will come from savings due to the income limitation applied to higher earners.
• Total payments for the Child Bonus and rebates combined will not exceed $231 billion.

Method of Distribution

The payments will be distributed automatically by the Internal Revenue Service (IRS):

• Payments can be issued via direct deposit, paper check, or prepaid debit card.
• A simplified filing procedure will be established for individuals who did not file a tax return but are eligible.

Administration and Reporting

The Secretary of the Treasury is given authority to implement necessary regulations and procedures:

• They may adjust payment amounts for administrative ease, ensuring total payments do not exceed the limit.
• Reports to Congress will detail the number of payments and total amounts disbursed.

Relevant Companies

• None found