H.R. 8305: Working Parents Tax Relief Act of 2026

The bill, titled the "Working Parents Tax Relief Act of 2026," proposes amendments to the Internal Revenue Code to enhance the Earned Income Tax Credit (EITC) specifically for parents of young children. The proposed adjustments focus on increasing the credit percentage based on the number and age of qualifying children. Here are the key provisions:

Increased Credit Percentages

• For One Child: Parents with one qualifying child who has not yet turned four would see an increase of 42.24 percentage points to their credit percentage.
• For Two or More Children: Parents with two or more qualifying children would receive an increase of 30.07 percentage points for each of their youngest three children who have not yet reached the age of four.

Increased Phaseout Percentage

For parents with one or more qualifying children, the phaseout percentage of the credit will be increased by 5 percentage points for each of the youngest three qualifying children who have not yet turned four.

Monthly Payments Option

The bill includes a provision that allows eligible taxpayers to opt for receiving refund payments in monthly installments, rather than as a lump sum. This option would be available for the refund amounts resulting from the changes proposed by this bill.

Effective Date

The amendments introduced by this bill would take effect for taxable years beginning after December 31, 2025.

Relevant Companies

None found.