Major EITC Boost Proposed: Bill Aims to Roughly Double Tax Credit for Working Families Starting 2026

This part of the "Boost the Middle Class Act" gets right to the point: it proposes a significant increase to the Earned Income Tax Credit (EITC), a refundable credit designed to help low- and moderate-income working individuals and families. If enacted, these changes outlined in Section 2 would apply to tax years starting after December 31, 2025 – meaning the effects would first appear on tax returns filed in early 2027. The core idea is to put more cash back into the hands of those who are working but may still be struggling to make ends meet.

Bigger Credits, Broader Reach?

The legislation digs into the specifics of Section 32 of the tax code, proposing substantial hikes to the maximum credit amounts. For instance, the current maximum credit for a worker with no qualifying children (around $4,220) would jump to approximately $9,086 under this bill. Similar large increases are proposed for filers with one or more children. Just as importantly, the bill raises the income thresholds where the credit begins to phase out. For many single filers, that phase-out currently starts around $11,610 (depending on the number of children); this bill pushes that starting point up to nearly $25,000. Married couples filing jointly would also see their phase-out threshold increase.

Real-world impact: This means a single parent working full-time at a near-minimum wage job, or a two-income household managing childcare costs, might qualify for a significantly larger refund than before. Raising the phase-out levels could also mean that getting a small raise or working a bit more overtime is less likely to drastically reduce the credit amount received, potentially reducing a disincentive to earn more.

Keeping Pace with Rising Costs

Beyond just increasing the dollar amounts, the bill updates the mechanism for adjusting the EITC for inflation. It changes the base years used in the calculation formulas, swapping out older years like 1995, 2008, and 2015 for more current ones like 2025 and 2026. This might seem technical, but it's crucial for ensuring the credit's value keeps up with the actual cost of living people face today, rather than being eroded by inflation based on outdated economic conditions.

The Bottom Line: This section represents a direct attempt to bolster the financial stability of working families by significantly enhancing an existing tax benefit. By increasing the credit size, expanding eligibility slightly through higher income phase-outs, and updating inflation adjustments, the bill aims to make the EITC a more potent tool for poverty reduction and economic support, starting with the 2026 tax year.