Lower Your Taxes Act

A new monthly child credit would pay $350 for each child under 6 and $300 for each child 6 through 17. The money would go out by direct deposit each month, starting with months after December 2025. Today's yearly child credit would end at the same time.

The earned income tax credit is a refund for lower-paid workers. The bill would raise the top amount to $12,920 with one child, $21,600 with two, and $24,300 with three or more. It would start with the 2026 tax year.

For workers with no children, the credit would pay 35% of the first $15,000 earned, or up to $5,250. Today it pays 7.65% of the first $4,220. The bill would also open the credit at age 18 and drop the old cut-off at 65.

The credit would hold its full value until income passes $30,000, or $60,000 for a married couple. Above that it would fall by 7 to 10 cents per dollar, down from about 16 to 21 cents now. That lets it reach much further up the income scale.

Today a joint filer's income limit is only $5,000 higher than a single filer's. The bill would make it twice as high. Couples would no longer lose much of the credit just by filing together.

A new $500 credit would cover dependents the child credit does not reach, such as an older parent or a grown child you support. It would shrink above $400,000 for a couple, $300,000 for a head of household, and $200,000 for others.

Some states offer a work credit you can only use to cancel state tax, so people who owe little tax lose part of it. Treasury would pay that unused part in cash, starting with the 2026 tax year. The state has to sign an information-sharing deal first.

Treasury would have to run a program that writes to people who look eligible for the work credit. That covers filers who skipped it and people who did not file at all. It would start with tax years after 2025.

The monthly money could not be garnished, levied, or offset for federal or state debts, including back taxes. Banks would have to tag the deposits so they can be protected. A bank could not skip those steps just because a child support notice is attached.

The amount would drop by $50 a year for every $1,000 of income above $150,000 for a married couple. The line is $112,500 for most other filers. Families well above those lines could end up with nothing.

Monthly amounts would be estimated from an earlier tax year. If your real income came in higher, you would repay the extra when you file. The repayment is capped at the difference the higher income creates.

A final ruling that a child credit claim was fraudulent would block the credit and the monthly payments for 10 years. A ruling of reckless or intentional disregard of the rules would block them for 2 years.

When two people claim the same child, the IRS would decide who gets paid. It could show each side the other's return information. That covers income, marital status, address, where the child lived, and money spent on the child. This part would take effect the day the bill became law.

Long-term investment gains are taxed at lower rates than wages. Filers with taxable income over $1 million would lose that break and pay ordinary rates instead. The line is $500,000 for a married person filing separately, and it would rise with prices after 2026.

The tax rate on company profits would go from 21% to 28%. It would apply to tax years starting after 2025.

When a company buys back its own shares, it pays a tax on the value repurchased. That tax would go from 1% to 4%, starting with tax years after 2025.

Large companies pay a minimum tax based on the profits they report to investors. The bill would keep 15% on the first $5 billion and charge 25% on anything above that.