Democratic Bill Proposes Expansion of Earned Income Tax Credit to $5,500 per Child Under Age Four

Rep. , plans to introduce a bill to expand the Earned Income Tax Credit (EITC). The legislation, titled the Working Parents Tax Relief Act, would provide qualifying single or joint filers an additional credit of up to $5,500 for each of up to three children under age four.

This expansion targets parents facing costs related to child care and other expenses. The bill would increase the maximum income level for EITC eligibility to nearly $100,000 annually. It also directs the Treasury Department to establish a monthly payment system for the enhanced credit.

S. In the 2024 tax year, the average EITC amount distributed was $2,894, according to the Internal Revenue Service. The proposed changes aim to address affordability challenges for working parents. The bill has support from organizations including Third Way, Americans for Tax Fairness, and the Children's Foundation.

Background on the Earned Income Tax Credit Congress has previously modified tax credits to support families.

In 2021, the American Rescue Plan expanded the Child Tax Credit to $3,000 or $3,600 per child, depending on age. That expansion reduced child poverty by nearly half during its implementation period. However, the enhanced Child Tax Credit was not renewed after it lapsed.

Multiple attempts to extend it did not succeed. The current bill draws on similar efforts to provide financial relief through tax policy.

Legislative Context and Prior Efforts Rep.

McDonald Rivet previously helped pass a state-level measure in Michigan while serving in the state Senate. That legislation increased Michigan's EITC match from 6% to 30%. In 2025, eligible Michigan families received an average credit of $3,856, according to the state's Department of Treasury.

S. House of Representatives is currently Republican-controlled. As a result, the bill faces challenges in advancing. Such proposals contribute to discussions on tax policy during election periods. Democrats have emphasized affordability in their messaging ahead of the 2026 midterm elections.

Polls indicate Democrats may gain majorities in the House and Senate. The bill aligns with broader efforts to adjust tax credits for families. " — Zach Moller, senior director of Third Way's economic program (CNBC) The proposal comes as families report increased expenses for housing, child care, and groceries.

Qualifying families would receive the additional credit through the existing EITC framework. Implementation would depend on congressional approval and Treasury Department action.