The Lower Your Taxes Act expands the Earned Income Tax Credit and establishes a monthly refundable child tax credit while increasing corporate tax rates and limiting capital gains benefits for high-income earners.
Emilia Sykes
Representative
OH-13
The Lower Your Taxes Act proposes significant revisions to the federal tax code, including a major expansion of the Earned Income Tax Credit and the establishment of a monthly, refundable child tax credit. The bill also seeks to increase revenue by raising corporate tax rates and limiting preferential capital gains tax rates for high-income earners. Additionally, it mandates that any net revenue generated by these changes be prioritized for deficit and debt reduction.
Tax Overhaul Set for 2026: Monthly $350 Child Payments and Higher Corporate Rates Proposed
The Lower Your Taxes Act is a massive reshuffling of the IRS rulebook that aims to put more cash in the pockets of workers and parents while picking up the tab from big corporations and high earners. Starting in 2026, the bill would swap the traditional annual child tax credit for a monthly payment system—sending families $350 per month for kids under 6 and $300 for those aged 6 to 17. It also supercharges the Earned Income Tax Credit (EITC) by nearly quadrupling the credit rate for childless workers and opening eligibility to anyone 18 or older, removing the old age-65 cap. To pay for these boosts, the bill hikes the corporate tax rate from 21% to 28% and targets stock buybacks with a 4% excise tax.
Direct Deposits for Diapers and Daycare
Under Section 5, the bill moves away from waiting until tax season for a lump sum. If you’re a single parent making under $112,500 or a married couple under $150,000, you’d see monthly deposits hit your account automatically. For a family with two toddlers, that’s an extra $700 a month to help with the grocery bill or childcare costs. The bill even sets up an online portal so you can update your income or family size in real-time. However, there’s a catch: if you receive more than you’re eligible for because your income jumped mid-year, the IRS might come looking to 'recapture' that money during tax season, which could lead to some unexpected bills for families on the edge of the income brackets.
A New Deal for Workers and Seniors
Section 3 effectively gives a raise to low-to-moderate income workers. By lowering the entry age to 18 and ditching the 65-year-old cutoff, the bill acknowledges that a 19-year-old starting their first trade job and a 70-year-old working part-time at a hardware store both need a break. For those without kids, the maximum credit calculation jumps from 7.65% to 35% of earned income. The IRS is also tasked with a 'Taxpayer Notification Program' to hunt down people who qualified but forgot to claim the money, essentially acting as a proactive customer service arm for the tax code.
Raising the Bill for the Top Tier
While families and workers see credits, Section 6 and 7 turn up the heat on the wealthy and big business. If your taxable income clears the $1 million mark, you lose the 'discounted' capital gains rates; your investment profits will be taxed at the same higher rates as regular salary. On the corporate side, the bill introduces a tiered Alternative Minimum Tax, hitting companies with over $5 billion in income with a 25% rate. While the bill states in Section 2 that this extra revenue should go toward killing the national deficit, the immediate reality is a shift in the tax burden: less for the household kitchen table and more for the corporate boardroom. The challenge will be in the execution—managing monthly payments for millions of families is a logistical mountain for the IRS to climb without technical glitches.