The Lower Your Taxes Act makes sweeping changes to federal tax credits and corporate taxes, aiming to put more money in the hands of working families while raising taxes on large corporations and the wealthiest investors. The Earned Income Tax Credit (EITC — a refundable credit for low- and moderate-income workers) would be nearly doubled in value, with the minimum eligible age lowered from 25 to 18; workers in states that offer a non-refundable state EITC would also receive a new federal supplement converting that state credit to cash. The existing Child Tax Credit (currently up to $2,000 per child annually) would be replaced starting in 2026 with a new monthly system paying $350 per month per child under 6 and $300 per month per child ages 6–17, with advance payments sent automatically each month and the full amount refundable regardless of how much tax a family owes; a separate $500 credit would be added for adult dependents not covered by the child credit. On the corporate side, the federal corporate income tax rate would rise from 21% to 28%, the excise tax on stock buybacks (when companies repurchase their own shares) would quadruple from 1% to 4%, and the corporate alternative minimum tax would be restructured to impose a higher 25% rate on the largest companies with over $5 billion in book income. Taxpayers with annual taxable income above $1 million would lose access to the lower capital gains tax rates currently available to all investors, paying ordinary income rates on investment profits instead. The IRS would be required to notify workers who appear eligible for the EITC but did not claim it, and to operate a multilingual online portal where families can update their information to adjust monthly child payments.
Corporate Benefits
- Corporate income tax rate — Raised from 21% to 28% for all C-corporations
- Stock buyback excise tax — Quadrupled from 1% to 4% on share repurchases by publicly traded companies
- Corporate alternative minimum tax — Two-tier rate added: 15% on income up to $5B, 25% on income above $5B
- Preferential capital gains rates — Eliminated for taxpayers with taxable income above $1,000,000
Average Household Impact
- EITC credit percentage — Nearly doubled for families with children (34%→68%, 40%→80%, 45%→90%)
- EITC earned income ceiling — Raised from roughly $6,300 to $19,000 (one-child filers), expanding credit reach
- EITC phaseout rate — Reduced from ~16–21% to 7–10%, letting workers keep more credit as income rises
- EITC minimum age — Lowered from 25 to 18, extending credit eligibility to young adult workers
- State EITC supplement — Federal cash payments added for workers in states with non-refundable EITC programs
- Monthly Child Tax Credit — New $350/month (under age 6) and $300/month (ages 6–17) replaces the existing $2,000 annual credit
- Child Tax Credit refundability — New credit is fully refundable, benefiting families who owe little or no federal tax
- Dependent credit — New $500 annual credit added for adult dependents not covered by the child credit
- Monthly CTC advance payments — IRS required to send payments monthly without waiting for annual tax filing
- CTC garnishment protection — Advance child payments shielded from debt collection and federal offset programs
Transparency & Accountability
- IRS EITC outreach requirement — Treasury must notify likely-eligible workers who did not claim the credit
- Multilingual online portal — IRS required to operate child payment portal in multiple languages
- Annual payment notice — IRS must send each recipient a written summary of all advance child payments made each year
Congressional Summary
Lower Your Taxes Act This bill increases the earned income tax credit (EITC), replaces the child tax credit with an allowance, establishes a new dependent tax credit, limits the capital gains tax rates, and increases taxes on corporations.The billincreases the EITC amount,lowers the EITC eligibility age to 18 years (from 25 years) and eliminates the maximum age limit,increases the EITC phaseout amount for joint filers to twice that of single filers, and requires the Internal Revenue Service (IRS) to notify individuals of their EITC eligibility.The bill requires the IRS to create a program for paying individuals certain amounts related to the nonrefundable portion of state EITC amounts.The bill replaces the child tax credit with a monthly allowance of up to $350 per child depending on the child’s age (subject to income limitations and adjustments for inflation) and requires the IRS to send the allowance to individuals monthly.The bill establishes a tax credit of $500 for each qualified dependent (subject to income limitations).Further, the billincreases the corporate income tax rate to 28% (from 21%),increases the excise tax on corporate stock buybacks to 4% (from 1%), andcreates a new 25% corporate alternative minimum tax bracket applicable to adjusted financial statement income exceeding $5 billion.Finally, the bill precludes individuals with taxable income exceeding $1 million ($500,000 for married individuals filing separately) from applying the capital gains tax rates to net capital gains and requires the limits to be adjusted for inflation.
Legislative Subjects
Details
- Congress
- 119th
- Chamber
- House
- Status
- summarized
- Action
- Introduced in House
- Action Date
- 2025-01-15
- Date Added
- 2026-06-04
- Source
- Congress.gov →
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