Earned Income Tax Credit would rise to $5,500 per kid under new Dem bill

Rep. Kristen McDonald Rivet, D-Mich., will introduce a new bill to expand the Earned Income Tax Credit to provide parents with a credit of up to $5,500 per child under the age of four.

The bill, shared exclusively with CNBC, is called the “Working Parents Tax Cut Act” and would qualify single or joint filers claiming up to an additional $5,500 in EITC credits for up to three children under the age of four. The bill would also increase the maximum income required to claim the EITC to approximately $100,000 annually and require the Treasury Department to establish a monthly payment system for the recovery.

This comes as Democrats, Republicans and President Donald Trump are campaigning across the country with a message of affordability, arguing that they have failed to lower costs for Americans. Polls show Democrats have the upper hand in the 2026 midterm elections and Trump could lose his majority in the House and Senate.

“Bringing home a baby is the most magical moment in a parent’s life, but it’s also the most expensive. Parents with young children today are working harder than ever, yet still finding it impossible to keep up with the spiraling costs of housing, child care, food and so much more,” said McDonald Rivet. “We need to lower their taxes now. Our bill puts thousands of hard-earned dollars back in their pockets and helps parents pay their bills while they raise their families.”

The EITC is open to low- to moderate-income workers and families and provides them with tax breaks. The average EITC amount paid to U.S. individuals and families in tax year 2024 was $2,894. Internal Revenue Service.

Congress has increased tax credits in the past. In 2021, the American Rescue Plan increased the Child Tax Credit from $2,000 to $3,000, or $3,600 per child. Boost interrupt child poverty nearly half, but was allowed to lapse by Congress and was never renewed despite many attempts.

Since Republicans control the House, McDonald Rivet’s bill has little chance of advancing. But bills like this set the stage for Democrats’ messaging in an election year.

The new bill has support from groups like the Third Way, Americans for Tax Justice and the Children’s Foundation.

“The Working Parents Tax Cut Act of 2026 would provide real relief to working and middle-class parents,” Zach Moller, senior director of Third Way’s economics program, said of the bill.

McDonald Rivet helped pass a similar bill. Michigan The state Senate increased Michigan’s EITC match from 6% to 30%.

Eligible Michigan families received an average loan of $3,856 in 2025, according to the state’s Treasury Department.