Increases several dollar amounts and the phaseout thresholds used to calculate the Earned Income Tax Credit (EITC) and changes how the law handles inflation adjustments for those figures. The revisions update numeric entries in the EITC tables in Internal Revenue Code section 32(b)(2)(A) and 32(b)(2)(B) and take effect for tax years beginning after December 31, 2025.

The changes raise the credit value and/or extend eligibility for many low- and moderate-income workers and families (including married filers filing jointly), require the IRS and tax-preparation systems to update tables and forms, and will increase EITC outlays compared with current law (reducing federal receipts to the extent the credit increases).