All-Americans Tax Relief Act of 2025

This bill would change federal income taxes for families and workers. It raises the Earned Income Tax Credit and makes the Child Tax Credit fully refundable, meaning families can get the full amount even if they owe no income tax . It also adds or expands deductions you can claim without itemizing, such as for medical bills, daycare, public transit to work, tutoring, credit card interest, and rent on your main home .

It also changes other rules: more forgiven personal debt would not be taxed as income, and the top long‑term capital gains tax rate would rise to 25%. Many changes would apply to tax years beginning after December 31, 2026 (the 2027 tax year).

• Credits

  • Earned Income Tax Credit: increases the credit and updates income rules for when it phases in and out.
  • Child Tax Credit: $2,000 for each of up to 3 children, plus $500 for each additional child; reduced as income rises above $110,000 (joint), $75,000 (single), or $55,000 (married filing separately); Social Security numbers are required; amounts adjust for inflation after 2025; fully refundable .

• New or expanded deductions you can claim without itemizing

  • Medical expenses and daycare: removes the medical “threshold” so more bills count, and lets you deduct daycare tuition for a child under age 7.
  • Commuting: lets eligible workers deduct public transit to and from work if they work at least 20 hours a week; income limits apply (up to $250,000 for joint filers, $125,000 others); rules to define covered costs are due by January 1, 2027.
  • Tutoring: up to $2,500 for small‑group or one‑on‑one tutoring in core subjects for a dependent who attends a Title I‑eligible public school or any charter school.
  • Credit card interest and rent: up to $2,500 of credit card interest; a rent deduction for your main home that shrinks as income goes over $150,000 (joint) or $75,000 (others), by 1% for every $500 ($1,000 joint) over those levels .

• Other changes and timing

  • More forgiven personal debt would not be counted as income (for individuals), and the top long‑term capital gains rate would increase to 25%; most provisions start with the 2027 tax year, and several sections specify this effective date .