Rep. Kristen McDonald Rivet, D-Michigan

Rep. Kristen McDonald Rivet, D-Michigan, introduced the Working Parents Tax Relief Act, which would expand the Earned Income Tax Credit by giving parents up to an additional $5,500 per child under the age of four, for up to a maximum of three children and increasing the maximum qualifying income for the EITC to nearly $100,000 if the filer has children under the age of four.

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The bill would also require the Treasury Department to create an optional monthly payment system for this EITC enhancement, so families can access their benefits throughout the year. 

An analysis from PolicyEngine indicated the bill would cut taxes for over 4 million families and reduce the child poverty rate by 7% by 2035, with nearly 75% of the benefit going to families with incomes under $50,000.

"Bringing home a baby is the most magical moment of a parent's life, but it is also the most expensive," said McDonald Rivet in a statement last month on Tax Day. "Parents with toddlers today are working harder than ever, but still find it impossible to keep up with the out-of-control costs of housing, child care, groceries, and so much more. We need to cut their taxes now. Our bill puts thousands of hard-earned dollars back in their pockets, helping parents keep up with their bills while raising their families."

The bill has attracted support from a wide array of groups, including Third Way, Detroit Regional Chamber, Americans for Tax Fairness, Chamber of Mothers, First Focus Campaign for Children, Economic Security Project Action, Center for Law and Social Policy, Flint & Genesee Chamber, Saginaw County Chamber of Commerce, Flint & Genesee Group, Children's Foundation of Michigan, Single Family Living, Urban League of West Michigan, Feeding America West Michigan, Oakland Forward, Brilliant Cities, Anderson Economic Group, The Source, Lighthouse, Brightmoor Alliance, First Five Year Fund, Michigan Nonprofit Association, Michigan League for Public Policy, United Way of Midland County, and the Accounting Aid Society.

On Thursday, a report from the Institute on Taxation and Economic Policy noted that approximately 10 million adults and 8 million children across the U.S. would benefit from the bill this year if it were passed. The average tax cut per household would be nearly $4,500 a year. About 70% of the benefits would go to households in the bottom 40% of income earners, while 97% of the benefits would go to the bottom 60%. However, the bill would only affect approximately 3% of households in the U.S.

The EITC program has long been blamed for improper payments by the IRS and the Treasury Department. According to a separate report released Monday by the Government Accountability Office, the EITC accounted for an estimated $21 billion in improper payments in fiscal year 2025. However, it's been an effective anti-poverty program, and the ITEP report cites figures from the Center on Budget and Policy Priorities finding that it lifted an estimated 4.4 million people above the poverty line in 2024, including 2.3 million children.