119th (2025–2027)
H.R. 8305
The Working Parents Tax Relief Act of 2026 increases the earned income tax credit for low and moderate-income working parents with young children under age 4. Parents with one qualifying child under age 4 would receive a 42.24 percentage point increase in their credit, while parents with two or more young children would receive a 30.24 percentage point increase for each of their three youngest children under age 4. The law also increases the phaseout percentage by 5 percentage points for each young child under age 4, allowing parents to keep the credit at higher income levels. The bill permits eligible taxpayers to receive their credit as monthly payments throughout the year rather than waiting until tax filing, providing more regular cash flow for families with young children. The changes take effect for tax years beginning after December 31, 2025.