Sponsors (4)
The bill could increase child tax credit benefits for some families while giving the IRS and taxpayers time to adapt, but it also risks reducing benefits for others and creates transitional uncertainty and administrative costs.
Low- and middle-income families could receive a larger refundable child tax credit if the bill raises the replaced $3,000 threshold, increasing after-tax income for affected children and households.
Taxpayers and the IRS get time to plan and adapt because the change is effective for taxable years after 2025, reducing immediate disruption to withholding, tax preparation, and agency systems.
Low-income families could see reduced or lost refundable child tax credit beginning in 2026 if the new threshold is set lower, cutting after-tax income for affected households.
Removing paragraph (6) of section 24(h) may eliminate or change an existing rule or exception, creating uncertainty for taxpayers, preparers, and financial institutions until the IRS issues clarifying guidance or regulations.
Changes to the refundable credit could raise administrative burdens for the IRS and tax preparers (rulemaking, systems updates), increasing compliance costs for taxpayers and government.
Based on analysis of 2 sections of legislative text.
Modifies the earned income threshold and removes a paragraph in IRC §24 to change how the refundable child tax credit is calculated, effective for tax years after 2025.
Changes to the tax code adjust the earned income threshold used to calculate the refundable portion of the child tax credit and remove a related paragraph of current law. The changes apply to tax years beginning after December 31, 2025. The amendment revises Internal Revenue Code section 24(d)(1)(B)(i) by replacing the current "$3,000" earned income reference with a new threshold (text not provided) and deletes paragraph (6) of section 24(h). This alters how the refundable credit is computed for eligible taxpayers in future years.
Official title: To amend the Internal Revenue Code of 1986 to modify the earned income threshold for the refundable child tax credit.
Introduced September 3, 2026 by Carol Devine Miller · Last progress September 3, 2026