As Congress forwards its latest tax proposal to President Donald J. Trump, the House and Senate versions of the One Big Beautiful Bill Act (OBBBA) claim to support working families. However, rather than focusing on directing the Child Tax Credit (CTC) toward families in need by increasing its refundable portion or phasing in benefits more quickly, the proposed changes largely benefit higher-income households. Simultaneously, these bills introduce new layers of bureaucracy that could make it harder for low-income families to access the Earned Income Tax Credit (EITC), potentially leading to fewer working families receiving their entitled support.
Both legislative chambers propose modest and temporary expansions of the CTC. The House bill increases the maximum per-child credit from $2,000 to $2,500 from 2025 through 2028 before reverting back with inflation indexing. The Senate offers a smaller increase to $2,200 starting in 2025 with annual inflation adjustments beginning in 2026.
These increases are unlikely to reach those most in need. Both bills maintain a partially refundable structure established by the Tax Cuts and Jobs Act, capping refundability at $1,700 in 2025 and phasing it in slowly based on earnings above $2,500. Consequently, low-income families with little or no tax liability may not receive the full credit. For instance, a family with three children must earn at least $40,000 to access the full refundable amount while those earning up to $400,000 remain eligible for full benefits.
The House version introduces new hurdles that could strip eligibility from millions of otherwise qualifying children by requiring both parents have Social Security Numbers (SSNs) to claim the credit—even if their child is a U.S. citizen—disqualifying an estimated 4.5 million American children living in mixed-status immigrant families. The Senate bill is less restrictive; it allows claims if at least one parent has an SSN.
In 2021, Congress temporarily made the CTC fully refundable and expanded it significantly; this led to a substantial drop in child poverty and improved financial stability for many families. However, current proposals do not incorporate these successful elements.
The EITC sees focus shift towards enforcement rather than expanded benefits under both bills through a pre-certification requirement starting as early as 2026: Families must verify their child’s eligibility with IRS before claiming EITC—a major change from current practice affecting nearly 20 million families annually.
This requirement functions like a universal audit for low-income families forcing them into detailed paperwork proving relationship and residency prior refund issuance—potentially overwhelming IRS resources already limited for high-income audits despite greater responsibility among such groups for tax avoidance issues.
Concerns over EITC’s “improper payment” rate often exaggerate issues since most errors arise from technicalities or complex family arrangements rather than fraud; actual fraud represents only about four percent according to reports which treat these figures as evidence of widespread abuse risks undermining effective programs like EITC proven over decades boosting work reducing poverty improving outcomes among children involved therein once again adding red tape deters legitimate claims delays refunds diminishes program effectiveness demonstrated repeatedly previously including during failed similar certification pilot conducted by IRS back during early 2000s ultimately leaving behind lowest income earners whose needs remain unmet under proposed legislative changes impacting broader socio-economic landscape adversely overall ultimately choosing better path delivering all not just select few remains viable option lawmakers today yet choose embrace going forward now accordingly henceforth thereby finally concluding thusly stated hereinabove forthwith…
