The Keep Your Pay Act increases the standard deduction and top tax rates for high earners while expanding the Earned Income Tax Credit and establishing a new, monthly refundable child tax credit.
Cory Booker
Senator
NJ
The Keep Your Pay Act provides tax relief to workers and families by significantly increasing the standard deduction and expanding the Earned Income Tax Credit. It also replaces the existing child tax credit with a new, refundable monthly payment system to provide more consistent financial support. To offset these changes, the bill implements a temporary increase in income tax rates for the highest earners.
Keep Your Pay Act: Standard Deduction Doubles and Monthly Child Tax Credit Checks Arrive in 2026
The Keep Your Pay Act is a massive overhaul of how the IRS handles your money, shifting from once-a-year tax refunds to a system that puts cash in your pocket monthly. Starting in 2026, the bill would more than double the standard deduction for most taxpayers from $23,625 to $56,250 for a ten-year period (Section 101). To pay for this and other credits, the bill bumps the top two tax brackets from 35% and 37% up to 41% and 43%. It’s a classic 'rob Peter to pay Paul' scenario, where the highest earners cover a significantly larger tax break for middle- and lower-income workers.
Monthly Checks for Parents
Perhaps the biggest shift is the end of the annual Child Tax Credit as we know it. Under Section 204, the bill replaces the old system with a monthly 'specified child allowance.' If you have a kid under age 6, you’d receive $360 every single month; for kids 6 to 17, it’s $300. There’s even a one-time $2,400 'new baby' boost for the month a child is born. For a family with two school-aged kids, that’s an extra $600 a month hitting your bank account via direct deposit to help with groceries or daycare, rather than waiting for a lump sum in April. However, there is a catch: if your income jumps mid-year or your custody situation changes, you might have to pay some of that money back when you file your return.
More Love for Childless Workers
The bill also permanently fixes a long-standing quirk in the tax code that often left low-wage workers without children with almost no tax relief. Section 201 lowers the age to claim the Earned Income Tax Credit (EITC) from 25 down to 19 (and as low as 18 for former foster youth). It also scraps the age cap that used to cut people off at 65. By doubling the credit and phase-out percentages to 15.3%, a retail worker or tradesperson starting their career—or a senior working part-time—could see their credit amount jump significantly, providing a much-needed cushion against rising living costs.
The Fine Print and Friction
While the extra cash sounds great, the administrative side is complex. The IRS will be tasked with building a new online portal to track 'presumptive eligibility' (Section 7527A). This means you’ll have to keep the government updated on your life in real-time. If you’re a co-parent in a 'complex dependency situation,' things could get messy; the bill includes tie-breaker rules for when two people claim the same child, and the IRS is authorized to disclose certain info to co-parents to settle disputes. For high-income professionals, the 6% rate hike is a direct hit to the bottom line, but for the average person juggling a 9-to-5 and family life, the bill aims to trade a distant tax refund for immediate, monthly breathing room.