Universal Child Benefit Program Launches in 2026, Replacing Child Tax Credit and EITC

The “End Child Poverty Act” is a major structural overhaul of how the government supports families with children, shifting from tax credits to direct cash payments. Starting after December 31, 2025, this bill establishes a Universal Child Assistance Program (UCAP) that will provide a monthly cash benefit to nearly every child under 19 in the U.S. This new benefit will be administered by a brand-new office within the Social Security Administration (SSA).

The New Monthly Check: How UCAP Works

Forget waiting until tax time; this new benefit is designed to be a predictable monthly payment. The amount is calculated based on the difference between the annual federal poverty guideline for a two-person household and the guideline for a single individual. That number is then divided by 12 to get the monthly payment. For example, if the difference between those two poverty levels is $10,000, every qualifying child gets $833 a month, deposited directly. The bill specifically states that this cash payment cannot be counted as income or resources when determining eligibility for other federal, state, or local programs, effectively eliminating the "welfare cliff" where earning more money makes you ineligible for other aid. This is a huge deal for families currently navigating overlapping benefit rules.

To make sure eligible kids don’t fall through the cracks, the SSA is authorized to use data shared by the IRS to automatically enroll children unless their parents opt out. This is intended to boost participation, especially among families who might not file taxes or know how to apply for benefits. However, it also means the IRS will be sharing taxpayer identity information with the SSA for this purpose, a significant expansion of data sharing that taxpayers should be aware of.

Trading Credits for Cash: The Big Swap

Here’s the part that requires a close look: to fund and implement this new monthly benefit, the bill terminates both the Child Tax Credit (CTC) and the Earned Income Tax Credit (EITC) for tax years beginning after December 31, 2025. This is a massive change. The CTC and EITC are currently the two largest tax benefits for working families, and their loss will be felt immediately. For families who currently receive a high EITC benefit—which is specifically designed to reward work—the new flat-rate UCAP might not entirely make up the difference, depending on their income and family size. For example, a single parent with two children who currently receives a substantial EITC based on their earnings will need to run the numbers to see if the new flat monthly UCAP benefit outweighs the combined value of the two tax credits they are losing.

New Credits for Adults

While the child benefits are being consolidated, the bill introduces two new, smaller refundable tax credits aimed at adults, also kicking in after 2025. First, there’s a new $700 refundable credit for taxpayers supporting an adult dependent (someone over 18 who qualifies as a dependent). Second, a new $700 refundable credit is created for eligible adults (ages 19 to 64) who aren't claimed as dependents. This second credit is phased out quickly: it starts to disappear once a single filer’s Adjusted Gross Income (AGI) hits $20,000 or a married couple’s AGI hits $40,000, reducing the credit by 5% of the income over those thresholds. Both of these new credits are subject to annual inflation adjustments. These credits appear to be an attempt to provide some targeted relief to working adults and those caring for elderly or disabled dependents, but their relatively small size and quick phase-out mean they won’t replace the financial impact of the lost EITC for many low-to-moderate income workers.