Lower Your Taxes Act

Summary#

This bill makes many changes to federal taxes and tax credits. It expands the earned income tax credit (EITC) by increasing credit percentages, raising the income amounts used to calculate the credit, lowering the age limit to 18, and directing the Treasury to notify people who may be eligible. It creates a refundable monthly child tax credit with advance monthly payments ($350 per month for children under 6 and $300 per month for children 6–17) and a $500 credit for certain other dependents. It directs the IRS to build an online portal, allow presumptive eligibility, set rules for recapture of overpayments, and coordinate payments with U.S. territories. The bill also treats certain State nonrefundable EITC amounts as refundable for federal payment purposes. For high-income taxpayers, the bill limits use of capital gains tax rates to taxpayers with taxable income at or below $1,000,000 (adjusted for inflation). It raises several corporate taxes: the corporate income tax rate from 21% to 28%, a stock repurchase tax from 1% to 4%, and changes corporate alternative minimum tax brackets. Most provisions apply to taxable years or months beginning after December 31, 2025.

What it means for you#

  • Low- and moderate-income workers: the EITC formula in the tax code is changed to increase credit percentages and raise the income levels used to calculate the credit. The EITC will be available starting at age 18. The Treasury must notify people it thinks may be eligible.
  • Parents and caregivers: a new monthly child tax credit will provide advance monthly payments. For each month the bill estimates or confirms eligibility, a taxpayer may receive $350 per month for each child under 6 and $300 per month for each child age 6 through 17. A separate $500 credit is available for other qualifying dependents. The IRS will run a portal to manage enrollments and updates. Rules require taxpayer and child identification and include recapture rules for improper payments.
  • State EITC claimants: people who claim a State nonrefundable EITC may get a federal payment equal to the amount their State credit would have been if it were refundable, subject to State cooperation and IRS rules.
  • Higher-income individuals: preferential capital gains tax rates would not apply to a taxpayer whose taxable income exceeds $1,000,000 (with inflation adjustments in later years).
  • Corporations and investors: the corporate income tax rate increases from 21% to 28%, the tax on corporate stock repurchases increases from 1% to 4%, and the corporate AMT rate structure is changed.
  • Timing: most changes take effect for taxable years or calendar months beginning after December 31, 2025.

Expenses#

The bill text creates new monthly payments (child credit advances and state EITC equivalency payments) and changes tax rates for individuals and corporations. The bill text does not include numerical estimates of total costs, revenue changes, or budget scores. No publicly available information on overall budgetary effects is included in the bill text provided.

Proponents' View#

The bill includes a Sense of Congress statement that any net revenue from the bill should first be used to reduce the national deficit and then the national debt. The bill text therefore expresses a view that revenue changes should be applied to federal fiscal balances.

Opponents' View#

No publicly available information.